Search "how much life insurance do I need" and you'll find a dozen rules of thumb — 10 times your income, 15 times, "enough to cover your mortgage." Each one can be a reasonable starting point, and each one can also be wrong for a specific household, because none of them ask what the coverage is actually supposed to replace.
Start with the job, not the multiple
Life insurance exists to replace something a household would lose if an income earner died: income, caregiving capacity, or the ability to pay down shared debt. A more reliable starting point than any multiple is to add up what would actually need to be covered, then work backward to a number.
- Income replacement. How many years of income would your household need replaced, and for how long — until children are grown, until a mortgage is paid off, until a spouse could reasonably re-enter or adjust their career?
- Debt that doesn't disappear. A mortgage, a car loan, or a line of credit doesn't go away with the person who was helping pay it. Add up balances that a surviving household would still owe.
- Future costs that are already assumed. Childcare, education savings, or a parent's care costs are often built into a household's plan even if no one's written them down.
- What's already in place. Subtract existing coverage — employer group life insurance, other policies, and liquid savings that could reasonably be used.
Add the first three, subtract the fourth, and you have a number grounded in your household's actual obligations rather than someone else's multiple.
Coverage tends to change as life does
A reasonable amount of coverage in your late twenties, before a mortgage or children, can look very different from a reasonable amount ten years later. This is one reason many households review coverage at life milestones — a new mortgage, a child, a change in income — rather than assuming a policy bought once still fits a decade on.
Employer coverage is a starting point, not a plan
Group life insurance through an employer can be a genuinely useful piece of a coverage plan, and it's often inexpensive relative to the coverage it provides. It's also usually tied to employment — coverage that can end when a job does, and a multiple (often one to two times salary) that may fall well short of what a full income-replacement calculation suggests. Treating employer coverage as a floor to build on, rather than the whole plan, tends to hold up better over time.
A worked example
Consider a household with a combined income of $95,000, a $340,000 mortgage balance, and two young children. A rough income-replacement calculation might aim to replace 10 years of the higher earner's income (roughly $600,000), add the mortgage balance ($340,000), and add an estimated $60,000 toward future childcare and education costs — a total of exactly $1,000,000 before subtracting anything already in place. If that household has $150,000 in existing employer group coverage and $40,000 in liquid savings earmarked for emergencies, the remaining gap is roughly $810,000. That's not a number pulled from a multiple — it's a number built from what the household actually owes and would need to replace.
Run the same exercise for a household with no mortgage, older children, and two similar incomes, and the number looks very different — likely smaller, since less needs replacing and less is owed. The framework is the same; the answer isn't, because the underlying obligations aren't.
Coverage doesn't need to be one static number
Some households buy a single policy sized for today's obligations and revisit it at milestones. Others layer coverage — for instance, a 20-year term policy sized to cover the mortgage and dependent years, plus a smaller, longer policy for a more permanent need like final expenses. Laddering coverage this way can better match declining obligations over time (a mortgage balance shrinks; dependents eventually become independent) without paying for more coverage than is needed in later years.
Where this gets personal
Everything above is a framework for thinking, not a substitute for working through your own numbers. Health, family structure, existing savings, and how a household would actually adjust after a loss all shift what "reasonable" looks like for a specific family. That's the conversation worth having with a licensed professional once you've done the rough math yourself — you'll ask sharper questions, and get more out of the time.