How Much Life Insurance Do I Need?

by Chris Huntley

In many cases, life insurance is purchased to replace lost income in the event of death.  This life insurance calculator will help you determine how much life insurance coverage you need, by solving for the face amount needed to replace your income.  Some considerations when determining how much life insurance you need are:

  1. Time Left until Retirement – Many peoples’ biggest asset is their ability to work and earn income.  Since most breadwinners purchase life insurance to replace that lost income in an unexpected death, you should consider how long you need to or plan to work.  If you only plan working another 10 years, you may not need more than 10 years of life insurance coverage, and so on.
  2. Spouse’s Income Potential - If your spouse does not currently work, would he or she be able to if need be?  What is his/her income earning potential based on experience and education?
  3. Consider Your Debt – It’s common to purchase life insurance to cover a mortgage, credit debt, or business loan.  Consider how long the term of payments is.  If your mortgage will be paid off in 30 years, do you really need whole life coverage?  Why not just 30 year term?
  4. Consider Your Savings & Investments – If you are actively saving money, adding to your 401K or IRA, etc., and your debts are decreasing as mentioned in #3, your need for insurance may greatly diminish in a short period of time.  Please consider all of the above when determining how much life insurance you need.

*Attention webmasters and website owners, if this is a helpful tool, please feel free to link to this page.

*Written by Chris Huntley. Huntley Wealth Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.
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Chris Huntley
Chris Huntley is the owner of Huntley Wealth Insurance, a San Diego life insurance agency. You can find him on Google + and Facebook. Over the past 8 years, Chris has consulted with over 2000 individuals about their insurance needs. He is a proud husband and father to three adorable girls.
Chris Huntley
Chris Huntley

{ 2 comments… read them below or add one }

Susan May 19, 2011 at 12:02 pm

This such a great tool – awesome idea and fantastic job by creating it!


Chris May 20, 2011 at 11:39 am

Thanks, Susan. I’m not genius on the computer, so it took quite a bit of hand holding to get this software onto my site. Quite the undertaking. Glad you find it useful. We’re excited to be able to offer it.


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