Life insurance is one of those things people know they need but often aren’t quite sure how much is “enough.” It’s easy to put off, underestimate, or assume you’re covered through work. But the reality is this: life insurance isn’t just for you; it’s for the people who depend on you. And making sure it’s sufficient can make all the difference in their financial stability.
1. Start with what you’re protecting
The first step in determining if you have enough life insurance is understanding what you’re protecting. For many people, that could include:
• Income replacement for loved ones
• Mortgage or rent payments
• Everyday living expenses
• Future costs like college tuition
• Final expenses and outstanding debts
A good rule of thumb is 10–15 times your annual income, but that’s just a starting point1. Your personal situation matters more than any general formula, and a licensed professional can help you talk this through.
2. Consider the gaps in employer coverage
Many people rely on group life insurance through their employer. While it’s a great benefit, it may fall short. Employer-provided certificates often offer coverage equal to one or two times your salary, which is sometimes far below what a family typically needs long term. There’s also a hidden risk: if you change jobs or lose employment, that coverage might not follow you.
Help calculate your insurance needs at royalneighbors.org/insurance.
3. Factor in life changes
Life doesn’t stand still, and neither should your coverage. Major milestones should trigger a review of your certificate:
• Getting married
• Having children or grandchildren
• Buying a home
• Taking on new debt
• Advancing in your career
• Change in health status
4. Think beyond the basics
Adequate life insurance isn’t just about covering immediate expenses; it’s about preserving a future.
Ask yourself if your family would be able to:
• Pay for funeral and burial services?
• Stay in their home?
• Maintain their current lifestyle?
• Afford education goals?
• Avoid financial stress during an already difficult time?
5. Don’t forget stay-at-home contributions
If one partner doesn’t earn a traditional income, it’s easy to overlook their economic value. But replacing childcare, household management, and other responsibilities can be costly. Life insurance can ensure those contributions are protected.
6. Revisit your coverage regularly
Life insurance isn’t a “set it and forget it” decision. A quick annual check-in can help ensure your coverage still aligns with your needs through life’s many twists and turns.
7. Your love, carried forward
The right amount of life insurance coverage may help carry your love forward, ensuring the people who matter most can move ahead with stability, continuity, and reassurance during life’s most difficult moments.
And that’s something worth getting right.
For the little loves in your life
Life insurance for your child or grandchild is one of the most meaningful ways to protect their future early.
It can provide lifelong protection
Coverage can be secured early, regardless of future health changes.
It builds value over time
Many certificates accumulate cash value that can support future needs such as their education, a first home, or other milestones.
Offers an affordable start
Premiums are typically lower when coverage is purchased at a young age.
Creates a lasting financial foundation
It’s a great way to contribute to their long-term financial stability.
1Source: Life Happens, “Life Insurance 101.” lifehappens.org/life-insurance-101/how-much-life-insurance-do-i-need
This article is for informational purposes only, you should not construe any information provided as legal, tax, investment, or financial advice. No reader should make any investment decision without first consulting their own financial advisor and
conducting their own research and due diligence.
The main purpose of life insurance is to provide a death benefit. Life insurance is not a short-term savings vehicle, and is not intended for short-term insurance needs. Life insurance is subject to reinsurance and underwriting requirements, a contestable period and suicide exclusion, and may have surrender charges. Not insured by the FDIC or any federal government agency. Not a deposit and may lose value. Life insurance and annuity products should only be purchased if they meet the financial needs of the applicant.