Get life insurance if someone depends on your income. Skip it if you’re single with no dependents. Term life covering 10-15x your salary is the right choice for the vast majority of people.
Do You Need Life Insurance?
| Your Situation | Need Life Insurance? |
|---|---|
| Married with children | ✅ Yes — essential |
| Married, spouse depends on your income | ✅ Yes |
| Single parent | ✅ Yes — critical |
| Co-signed on a mortgage or loan | ✅ Yes — protects co-signer |
| Supporting aging parents | ✅ Yes |
| Business owner with partners | ✅ Yes — key person insurance |
| Single, no dependents, no co-signed debt | ❌ No |
| Retired with sufficient savings | ❌ Probably not |
| Children are adults and financially independent | ⚠️ Depends on spouse’s needs |
How Much Coverage Do You Need?
Quick Method: 10-15x Salary
| Annual Salary | 10x Coverage | 15x Coverage |
|---|---|---|
| $50,000 | $500,000 | $750,000 |
| $75,000 | $750,000 | $1,125,000 |
| $100,000 | $1,000,000 | $1,500,000 |
| $150,000 | $1,500,000 | $2,250,000 |
Detailed Method (DIME)
| Component | Example Amount |
|---|---|
| Debt (mortgage, car loans, student loans) | $280,000 |
| Income replacement (salary × years needed) | $100,000 × 18 years = $1,800,000 |
| Mortgage payoff | (included in debt) |
| Education (kids’ college fund) | $200,000 |
| Total need | $2,280,000 |
| Minus: Existing savings & investments | -$200,000 |
| Minus: Spouse’s income capacity | -$500,000 |
| Minus: Social Security survivor benefits | -$300,000 |
| Coverage needed | $1,280,000 |
Term vs. Whole Life: The Numbers
$500,000 coverage for a healthy 35-year-old:
| Feature | 20-Year Term | Whole Life |
|---|---|---|
| Monthly premium | $25-$35 | $350-$500 |
| Annual cost | $300-$420 | $4,200-$6,000 |
| 20-year total premiums | $6,000-$8,400 | $84,000-$120,000 |
| Coverage amount | $500,000 | $500,000 |
| Cash value at year 20 | $0 | $60,000-$80,000 |
| If you invested the difference in index funds | ||
| Monthly investment ($350-$25 = $325/mo) | — | $325/month |
| Portfolio at year 20 (8% return) | $190,000 | — |
Term + investing the difference builds $190,000 vs. whole life’s $60,000-$80,000 cash value. Term wins by a wide margin.
What Affects Your Premium
| Factor | Lower Premium | Higher Premium |
|---|---|---|
| Age | Younger | Older |
| Health | Excellent | Health conditions |
| Smoking | Non-smoker | Smoker (2-3x more) |
| Term length | 10-year | 30-year |
| Coverage amount | $250,000 | $1,000,000+ |
| Gender | Female | Male |
Sample Monthly Premiums (20-Year Term, $500K)
| Age | Excellent Health | Average Health | Smoker |
|---|---|---|---|
| 25 | $18-$22 | $25-$35 | $60-$80 |
| 30 | $20-$25 | $30-$40 | $70-$95 |
| 35 | $25-$35 | $40-$55 | $100-$140 |
| 40 | $35-$50 | $55-$80 | $140-$200 |
| 45 | $55-$80 | $90-$130 | $220-$320 |
| 50 | $90-$130 | $150-$220 | $380-$550 |
The Bottom Line
If someone depends on your income, get term life insurance immediately. The cost is surprisingly low ($25-$50/month for most healthy adults under 40), and it protects your family’s financial future. Buy 10-15x your salary in coverage, choose a term that covers your dependents until they’re self-sufficient, and invest the savings vs. whole life premiums.
Related: Should I Keep Term Life Insurance? | Should I Get Disability Insurance?
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy