A quick, honest estimate using the DIME method, the one financial planners actually use: Debt, Income to replace, Mortgage and Education, minus what you already have. It shows the cover that would keep your family whole.
Many planners suggest roughly 10 times your annual income as a quick sanity check.
| Annual income | 10x income | 12x income |
|---|---|---|
| $40,000 | $400,000 | $480,000 |
| $60,000 | $600,000 | $720,000 |
| $80,000 | $800,000 | $960,000 |
| $100,000 | $1,000,000 | $1,200,000 |
| $150,000 | $1,500,000 | $1,800,000 |
For most families, term life insurance covers the need above at a fraction of the cost of whole life, for the years it actually matters (while you have a mortgage and dependents). Whole life is far more expensive and mixes insurance with investment; most planners suggest buying term and investing the difference unless you have a specific estate-planning reason.
Often yes. If one parent does not earn but provides childcare, cooking and household work, replacing that with paid help is expensive, so cover for them protects the family budget too. Add an estimate of that replacement cost to your figure.
If you have no dependents, no mortgage and enough savings to cover your debts and final expenses, you may not need life insurance at all. It is there to replace income and clear obligations for people who rely on you, not as a default purchase.