The right amount depends on the income, care, and obligations a family would need to replace. A calculation is a starting point for discussion, not a universal answer.
Estimate the household gap
Work out annual living costs after a death, including replacement care. Subtract reliable income that would continue. Choose the number of years support would be needed, and account for the possibility that costs and needs will change.
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Add one-time goals carefully
Include debts you intend to repay, final expenses, and planned education support. Count a mortgage once: if using a full payoff amount, adjust ongoing expenses to avoid counting the same loan payments again. Debt responsibility varies by ownership and applicable rules.
Subtract resources actually available
Consider existing coverage and savings that could realistically meet these needs. Do not assume every retirement account or jointly owned asset can be used immediately without costs or other consequences.
Try a hypothetical calculation
An annual support gap of $30,000 for ten years, plus $200,000 of planned one-time needs, totals $500,000 before adjustments. Subtracting $100,000 of available resources leaves $400,000. This simplified example excludes inflation and investment outcomes; it is not a recommendation.
Revisit the estimate
Review after a birth, home purchase, change in earnings, or major debt payoff. Compare coverage duration and a sustainable premium as well as the benefit amount.
Further reading: Consumer guidance. Explore our Money 101 guides.