How Much Life Insurance Coverage do You Need?

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

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UPDATED: Jul 27, 2020

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It’s all about you. We want to help you make the right life insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We partner with top life insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

How much life insurance coverage do you need? This is one of the most common questions we are asked by our customers and arguably the most important. The keyword here is ‘coverage,’ which includes not only the face amount of the policy but also the length of the coverage.

The short answer is it depends on your unique situation. There is no magic formula that can be applied to everyone. And as life insurance professionals, we are careful not to paint everyone with the same broad brush.

There are, however, some important guidelines that every life insurance applicant should consider:

  1. In the event of your untimely death, how much money would your family need to replace your income and how long would they need to replace it for?
  2. How much money would your family need to afford ongoing obligations and future needs such as health care expenses and college costs?
  3. How much money would be required to pay off your existing mortgage and other debts?

There may certainly be other considerations at play, but these guidelines provide a good foundation for determining your life insurance coverage needs.

QuickQuote also provides a handy coverage amount calculator you can use to figure out how much life insurance you need and a glossary to help you understand life insurance terminology. Also, stay tuned for a more extensive QuickQuote Article on the subject in the coming weeks. It will include areas of discussion such as life insurance company financial guidelines (yes, they exist), options for future coverage amount increases and policy conversions.

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