Guide
How much life insurance do you need?
A calculation tool and an explanation: the income years you should cover, what you owe, education expenses and what you're already protected by.
A straightforward method is totaling what your income would replace, minus what's already there. It's not perfectly precise, and it doesn't need to be: people buy coverage in round dollar amounts, and the goal is having enough to keep the family on track through the years when it counts most.
Coverage estimate
Estimate = income × years + debts + education − what you already have, rounded to the nearest $5,000. This is a beginning point, not professional advice.
Why those inputs
Income years. Most financial experts suggest a range from ten years to twenty; the right period for your situation depends on when your dependents will need money. Families in Tustin with young children typically pick longer coverage because the costs for childcare, housing and education all happen together.
Debts. The mortgage is usually the biggest one. If you had life insurance that would pay it off, your family could choose to stay in the house without the mortgage forcing a choice they can't afford to make.
Education. Set aside a rough amount per child in today's value. If you do it now, you won't have to get a second policy later to add it.
What you already have. Money saved in accounts you could draw from, and group insurance through an employer. When you change jobs, group coverage usually ends, so most people count only part of it.
Once you know the amount you want, the quote tool lets you compare what 10, 15, 20, 25 and 30 year terms cost for that amount from each carrier. Most families find that a bit more coverage than they first calculated costs only slightly more each month at younger ages.