Skip to Main Content

Start Of Main Content

How much life insurance do I need?

From your income to your children’s future education, here’s what to consider when you buy life insurance.

Mother playing with baby

Getting the right protection for your life

How much life insurance do I need? Is the life insurance I have through work enough? I bought life insurance a long time ago, do I need more now? These are common questions people have about life insurance, and the answers are different for everyone. As an individual, you have your own unique needs and dreams for the future, and you have your own unique family situation. Helen Lee, State Farm® agent in Buena Park, California, helps a lot of people with these kinds of questions, and she’s here to offer some good insights into how to figure out your unique life insurance needs.

What to look at

Figuring out how much life insurance you might need starts with looking at what and who you want to protect, and that often depends on what life stage you’re in.

  • If you’re newly married or a young parent, your income may be what you primarily need to protect. So if something happened to you, you could leave enough behind to help your spouse or family replace the lost income for a certain amount of time.
  • If your family is growing and you’ve purchased or upgraded your home, you may need to add additional coverage for some of your bigger assets. You might also be thinking about protecting your children’s future education needs.
  • If you’re going through a divorce, there are several factors to consider, especially if you have children.
  • If you’re nearing retirement, you may start thinking about what your spouse would need to live comfortably if they live longer than you.

Lee helps customers look at all of these factors and more. “We look at their income, their family size, their home’s value, their debt, their business if they own one. If they have children, we factor in everything from basic costs like food and clothes, to future costs like a college education. It comes down to how much your family might need, and for how long, to continue to live comfortably, if you were no longer there to help support them.”

Is my current coverage enough?

Many people who have life insurance through work assume that will be plenty for their family to live on. But as Lee puts it, “Many people don’t do a needs analysis with their work coverage. They see the number and feel secure with it, but they’ve never sat down and looked at the numbers to see if they’re even in the ballpark. For some people, it is enough, but for many people I’ve talked to, they find they need more.”

What if I can’t afford it?

So what if you’ve done an analysis of your needs, only to find out the premium isn’t something you’re able to afford right now? Lee describes it as a balance, and an ever-evolving conversation. “When we calculate proper coverage, we balance their budget with their needs. Budget is very important, so we start with helping customers find a solution that makes the most sense for them based on what they feel they can afford, while still feeling secure in their protection. We look at term versus whole life, things like that.

“Then, as their income and liability grow over time, they have more to protect but also more ability to afford more coverage. My team and I follow up with these customers on a regular basis so we can help them stay updated.”

Learn more

For help figuring out your own life insurance needs and to talk through your options, talk to your local State Farm agent today.

Get a quote for term life insurance – if you are interested in additional life products, please contact a State Farm Agent.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. State Farm makes no guarantees of results from use of this information.

State Farm Life Insurance Company (Not licensed in MA, NY or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
Bloomington, IL

Each insurer is financially responsible for its own products.


Also Important

Is Life Insurance Worth It?

Is Life Insurance Worth It?

Deciding if life insurance is worth buying starts with looking at what’s important to you.

Types of Life Insurance

Types of Life Insurance

Knowing what kind of life insurance is right for you starts with understanding your options.

Related Articles

What To Consider When Choosing a Beneficiary

What To Consider When Choosing a Beneficiary

What Factors Should You Consider When Choosing a Beneficiary?

Term Life Insurance vs. Whole Life Insurance: Which is Right for You?

Term Life Insurance vs. Whole Life Insurance: Which is Right for You?

Evaluating the pros and cons of these types of life insurance may help you decide.

What Is Return of Premium Life Insurance?

What Is Return of Premium Life Insurance?

Return of Premium life insurance may offer you a refund.