“How much life insurance do I need?” is the question we hear most, and “whatever my employer gives me” is usually the wrong answer. Employer coverage is often just one to two times your salary, which falls far short for most Utah families. Here is a simple way to find your real number.
A quick rule of thumb: 10x income
A common starting point is ten times your annual income. It is fast, but it ignores your actual debts and goals, so treat it as a floor, not a finish line.
A better method: DIME
Add up four things:
- D – Debt: credit cards, car loans, student loans, and final expenses.
- I – Income: your annual income times the number of years your family would need it replaced.
- M – Mortgage: the payoff balance on your home.
- E – Education: future college or training costs for your kids.
The total is your coverage target. For many Utah families it lands between $500,000 and $1 million, and thanks to term life pricing, that is usually far more affordable than people expect.
Do not forget a stay-at-home parent
Childcare, transportation, and running the household all have real replacement costs. A stay-at-home parent needs coverage too.
Review it as life changes
New home, new baby, new business, each milestone is a good reason to re-check your number. A quick annual review with your agent keeps your protection in step with your life.
Ready to find your number? Explore life insurance options or start a free quote with Fabco today.