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How much life insurance do I need?

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It depends on your individual circumstances and policy must-haves.

The primary purpose of life insurance is to cover end-of-life costs and protect your beneficiaries. So the amount you’ll need largely depends on the size of a safety net you want to leave behind.

What factors should I consider when assessing my life insurance needs?

Consider both your financial situation and the expected needs of your beneficiaries when building a life insurance plan. This includes:

  • Your number of dependents. A key purpose of life insurance is making sure there’s money left to take care of your loved ones when you die. Consider how many people depend on you and choose your benefit accordingly.
  • Your outstanding debt. While most debt should be covered by your estate’s assets, if you’ve got a cosigner on a loan or joint ownership of a house, that person becomes liable for your portion even after you pass. Life insurance can help ease that burden.
  • Beneficiary needs. If you’ve got kids, will they need help going to college? Are there any expected special medical needs? Consider the essential costs your beneficiaries may not be able to pay on their own.
  • Spousal support. A life insurance payout can help fund your partner’s retirement or extra care in old age, like senior living arrangements.
  • End-of-life costs. As gloomy as it is to consider, the cost of your funeral will likely be covered by life insurance. Since average costs loom larger than $5,000, life insurance coverage can ease the process for your loved ones.
  • Your monthly budget. Though life insurance is an important part of planning for the future, it shouldn’t break the bank. Find affordable coverage by deciding how much you can reasonably set aside each month after your critical bills are paid.

Can I afford to pay for life insurance?

The cost of your life insurance policy is mostly determined by your age, health and overall lifestyle. In general, the younger you are, the cheaper it is. The average term insurance rate for $250,000 coverage of a healthy nonsmoker younger than 45 is less than $30 per month.

Consider the two most common types of insurance offered — term and whole. Depending on your age and health, one of these options may be more affordable than the other.

  • With term insurance, if you survive the length of the policy, the insurance company doesn’t have to pay. Since there’s no inherent cash value, it’s often cheaper for people younger than 50.
  • But whole — also known as guaranteed life insurance — can be helpful for people with pre-existing conditions since the lifelong coverage comes with a set premium. Compare average costs to see what your rate could be.

Calculate your life insurance needs

How much life insurance do you need?

Answer three questions to see the coverage we recommend.

1) How much debt do you owe?
Include mortgages, credit cards, car loans, student loans and other debt.

$

2) How much do your loved ones need each month?
Start with how much you take home monthly, adding rent, food and necessities.

$

3) How many months will your loved ones need the income?
Indicate how long you think your loved ones need before they can sustain themselves in your absence

months

Your recommended coverage:

$50,000

Typically you'll want to add another $15,000-$20,000 for final expenses such as medical costs and funeral expenses.

Compare life insurance providers

Name Product Issue Ages Coverage Range Medical Exam Required
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
Compare quotes from 16 life insurance companies side by side.
18 - 75 years old
$100,000 to $5,000,000
Depends on provider and policy
Apply for a simple instant-decision policy free of charge. Compare quotes from multiple A-rated carriers.
21 - 54 years old
$50,000 to $1,000,000
No
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
Get a quote within minutes from more than a dozen insurers.
18 to 80 years old
$25,000 to $10,000,000
Depends on provider and policy
Compare quotes from over 40 highly rated carriers and get coverage shortly after approval.
20 - 80 years old
$25,000 to $10,000,000
No
Quickly get a quote for coverage with this marketplace, which compares term life insurance policies from 45+ carriers.
20 to 60 years old
$100,000 to $8,000,000
No
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
18 - 75 years old
$25,000 to $10,000,000
Yes, for policies over $1 million
Term life insurance with no medical exams for $1 million of coverage or less. Online application gets you a decision in 10 minutes.

Compare up to 4 providers

Is life insurance a must-have?

While life insurance acts as a financial cushion for loved ones when you die, it’s up to you to assess the actual needs of your circumstances. Reasons why you may decide to opt out of life insurance include:

  • No beneficiaries. If you’re young, single and healthy with no kids and have an extended family that’s financially stable, buying life insurance may not be essential to your loved ones’ survival. Similarly, if your kids are out of college, grown and supporting themselves, it may not be necessary to leave money behind.
  • Your job covers it. Employers sometimes offer life insurance as a benefit. These policies are referred to as group life. But they typically only cover one to two times your annual salary.
  • You don’t financially need it. If you and your spouse have enough assets and income accumulated to care for yourselves and your dependents independently, it may not be worth paying for the monthly premium.
  • You really can’t afford it. If paying for life insurance is going to be a financial burden, you may want to forgo it altogether until you’re in a better position to pay a premium.

Bottom line

Life insurance quotes are determined by your age, gender and health, but the actual amount you need is based on your personal financial obligations. Even if you’re stressed about the implications, comparing policies can help ease your mind and determine what’s feasible for your situation and budget.

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