Guide
How much life insurance do you need?
A quick calculation tool plus the logic used to build one: years of income, obligations, schooling costs, and amounts already insured.
The typical approach: calculate what your earnings would support over time, then subtract amounts you've already accumulated. While not exact, this method works well for purchasing insurance in standard increments. The real objective is choosing a figure large enough to maintain household stability through the most critical years.
Coverage estimate
Estimate = income × years + debts + education − what you already have, rounded to the nearest $5,000. This is merely a starting reference point.
Why those inputs
Income years. Most advisors suggest between ten and twenty years of income replacement; your situation dictates the precise timeframe based on how long your household will rely on your earnings. Families in Novato with young kids typically select longer spans due to the convergence of schooling, child-rearing, and housing expenses.
Debts. Your mortgage represents the biggest obligation in most households. With coverage that pays it off, your family keeps the option to stay in the home—rather than being forced to sell due to cash flow constraints.
Education. Allow a figure per child in present-dollar amounts. Accounting for this now beats waiting to purchase extra coverage down the road.
What you have. Savings and employer-provided insurance are relevant. Keep in mind that employment-sponsored coverage usually terminates when you leave the job, so only include a portion of what your employer offers.
After you've determined your amount, run it through the calculator to see pricing for 10 through 30-year options across all carriers. At younger ages, increasing coverage somewhat is popular since the added cost per month is usually modest.