Life insurance is an affordable way to protect the people you love and care about most. When you start exploring your life insurance options, you’ll have many choices to make—everything from the type of coverage to the company you get your policy from.
The right amount of life insurance needed will vary from person to person, so deciding how much life insurance you need can be tricky. Many people find that 10-12 times their income is enough coverage, but this simple approach might not always provide the support you’re looking for. Below are three main points to consider as you explore your life insurance options.
1. Think About How Much Life Insurance You Can Afford
When thinking about how much life insurance you can afford, start by considering your existing expenses, any potential future expenses (such as the cost of raising a child), and current debt and liabilities. You want to make sure your beneficiaries and dependents who currently rely on your income for some of these costs could maintain any outstanding payments while continuing to live without worrying about a potential financial burden.
2. Use Our Life Insurance Calculator to Determine How Much Life Insurance You Need
At SelectQuote, we can help you determine how much life insurance might be right for you and our life insurance calculator is an excellent place to start. With just a few questions, you’ll get an idea of how much coverage you need and how much it will cost.
3. Consider Which Term Life Policy Length Meets Your Needs
Term life insurance policies have a start date and an end date and typically the number of years are either 10, 15, 20, 25 or 30 years. Depending on your age, circumstances, budget, and approval, you’ll typically consider a policy from one of these popular five options.
| Policy Length | 10-year term | 15-year term | 20-year term | 25-year term | 30-year term |
| Who This Policy Might Benefit: | An individual with adult children, and is nearing retirement. | Couples in their 40’s with slightly older children, and who are seeking more financial security. | Young couple in their 30’s, and with young children (elementary school). | A great policy option for young couples (ages 25 to early 30’s) with young children. | A great option for young, newlywed couples that just purchased their first home, and with very young children (infants). |
| Average Rate: | $1 million in coverage: $123.17 per month for a 55-year-old male, or $90.87 for a female. | $1 million in coverage: $67.13 per month for a 45-year-old male, or $59.41 per month for a 45-year-old | $1 million in coverage: $34.84 per month for a 35-year-old male, and $30.53 for a 35-year-old female. | $1 million in coverage: $45.36 for a 25-year-old male, and $35.43 for a 25-year-old female. | $1 million is coverage: $50.90 for a 25-year-old male, and $39.85 for a 25 year-old woman. |
Table rates are based on 10-year, 15-year, 20-year, 25-year, and 30-year term policies for men and women in excellent health from one or more of the trusted companies we represent. Term rates were pulled on 12/2021. Your price could vary depending on your health, issuing company and other factors. Not available in all states.
4. Ask yourself: who depends on you for financial support?
Whether you’re buying life insurance to make sure your children are financially protected throughout their childhood or to protect your spouse until retirement, it’s important to consider all who might take a financial hit from the loss of your income. Your spouse, children, extended family, business partners, or people who’ve co-signed on loans—the more dependents you have, the more life insurance coverage you should consider.
5. Consider Any Future Financial Needs
Purchasing life insurance as early as possible is financially beneficial because life insurance rates tend to be more affordable the younger and healthier you are. This can help ensure your future needs are covered sooner than later and can save you money in the long run.
For example, you may want to safeguard paying for a future college education for your toddlers, ensure your spouse can pay off a home loan, and make sure your final expenses will be covered in the event of your passing.
Find the Right Amount of Life Insurance for You with SelectQuote
With our life insurance calculator and helpful SelectQuote licensed insurance agents, you can find the right coverage for you at the right price. And when it comes to weighing all your options and sifting through the fine print, we can help simplify the process. In just minutes, we can share life insurance coverage and cost comparisons from some of the most trusted insurance companies. We’ll take the time to learn more about your needs and find the best life insurance policy options available to you from the carriers we work with.
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