The right amount of life insurance replaces what your income provides and clears what your family would otherwise carry. A quick rule of thumb is 10–15× your annual income, but a needs-based calculation is more precise.
The DIME method
Add up Debts (excluding mortgage), Income to replace (years × annual income), Mortgage balance, and Education costs for your children. The total is a solid coverage target.
Adjust for your situation
Subtract existing coverage and liquid savings. Add for a stay-at-home parent's economic value, final expenses, or a legacy goal. Two-income households should insure both earners.
Term, permanent, or both
You can cover a large temporary need with term life and a permanent need with whole life or an IUL. A producer can size and structure it to fit your budget.
Is 10x income enough? +
It's a reasonable starting point, but a DIME calculation (debts, income, mortgage, education) tailors the number to your actual obligations and goals.
Should both spouses have life insurance? +
Usually yes — including a stay-at-home parent, whose unpaid work (childcare, household management) would be costly to replace.
Can I have too much life insurance? +
Insurers limit coverage to your financial justification (income, net worth). Within that, the goal is enough to protect your family without overpaying for coverage you don't need.