Guide
How much life insurance do you need?
How to decide: a step-by-step formula for the coverage amount, explained with context and an interactive calculator.
The usual approach: add up years of income plus any education expenses, subtract existing assets and group coverage, then round to a manageable number. It doesn't have to be precise—term insurance amounts come in round increments anyway, and the goal is simply a figure your household would need.
Coverage estimate
Formula = (annual income × number of years) + debts + education funds − existing savings and coverage, rounded to the nearest $5,000. Starting point, not a recommendation.
Why those inputs
Income years. Most financial advisors suggest ten to twenty years as the typical range; what makes sense depends on how many years your dependents would need your income. In Santa Cruz, families with young children often go longer because childcare, housing, and education costs pile up during the same decade.
Debts. The mortgage is typically the biggest. Enough coverage to pay it off gives survivors the freedom to choose whether to stay or move without being pushed by immediate financial pressure.
Education. Rough estimate per child in current dollars. It's simpler to roll education support into a single policy now than to add a separate policy later.
What you have now. Savings available for family use and workplace group coverage. Note that group plans usually stop when employment ends, so most people count only a portion.
Once you settle on an amount, the quote tool displays the monthly cost for 10 through 30 years from every carrier. Going higher than your calculation is common; the step up in cost is often small at younger ages.