How Much Term Life Insurance Do I Need?
mom and two kids playing on swingset, protected with term life insurance

Term life insurance is an affordable, dependable type of life insurance that’s a great fit for most people. If you have a mortgage or carry debt, term life insurance ensures that your loved ones aren’t left with this burden when you’re gone. 

With monthly premiums as low as $20 and customizable policy options, term life is adaptable enough to fit your needs, no matter what stage of life you’re in.   

How to calculate how much insurance you need

The coverage amount you select will affect how affordable your monthly premium will be. It’s also an important amount that should reflect how much financial support you want to provide to your loved ones.

Everyone’s needs are different when it comes to the amount of life insurance coverage they’ll need, but one simple trick is to calculate five to ten times your annual salary. This amount will give you a rough estimate of how much insurance would support your loved ones if you weren’t around to help with the family bills. You might need more or less coverage than this estimate.

If you have dependents and want to help pay for their college education or you own a small business, your coverage amount may increase. If you’re confident in your savings and retirement funds, you might need less coverage.  

What to do if you have debt and need life insurance

If you’re carrying debt, the amount of debt you currently have and could have in the future will factor into how much life insurance coverage you need. You’ll want to consider if you have any debt that’s cosigned with your spouse, such as your mortgage. When you’re calculating how much life insurance you need, you’ll want to factor in these costs so your loved ones would be financially prepared to pay off these debts.

In most cases, debt collectors cannot go after life insurance proceeds, and the death benefit will be passed to your beneficiary. If you pass away and have debts, they’ll likely be passed through your estate. In some cases, if your beneficiary is your spouse and you cosigned a debt, a collector could come after that debt.

It’s important to discuss the debt you’re carrying with your insurance agent if you have concerns about how much life insurance coverage you need.  

What to do if you already have life insurance through your employer

If you have life insurance through your employer, you’re off to a great start! However, in most cases, relying on this coverage alone won’t be enough financial protection for your loved ones.

Generally, employer-sponsored coverage only amounts to one- or two-years’ salary, which is usually not enough to support your loved ones in the same way that an individual term life insurance policy would.

It’s best to calculate your term life coverage needs while excluding your employer’s coverage, and then factor this policy in, adding your spouse or loved one as the beneficiary to both policies.

Your beneficiary will receive both policy payouts when you pass away, meaning that they’ll have the financial protection they need without relying solely on life insurance through your employer.  

What to do if you need to change your life insurance policy later on

If your term life insurance policy has guaranteed level premiums, you’re probably locked into that policy for the extent of coverage. If your needs change in the event that you paid off a mortgage or built up a great savings plan, you can get in touch with your Quility insurance agent to discuss your options.

If you end up needing more coverage due to having another child, purchasing a more expensive home, or your income increased, you might want to purchase a secondary term life policy with a different term length. We can help with that too!

How do I apply for term life insurance coverage?
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Application for coverage
Like other types of life insurance, term insurance starts with an application for coverage with an insurance company.  Quility partners with over 80 of the best life insurance companies in the country.
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Make payments
Once your policy is in force with an insurance company, you pay monthly, quarterly or annual premiums to maintain coverage. If you pass away during the term, your chosen beneficiary will receive a death benefit.
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Update your insurance coverage as needed
After the term has ended, it’s time to re-visit your needs. You can choose to part ways with your insurance company, extend coverage for a new term or convert your policy to permanent life insurance coverage.
Apply online for term life insurance with Quility

To apply for term life insurance, simply get started on our online application for term life insurance, which takes less than ten minutes to complete. In most cases, you won’t need to undergo a medical exam to get coverage. The insurance company usually takes a few days to approve your policy, then you’re all set!

Once your policy is in force, you’ll pay monthly premiums to keep the policy active.

Let’s Get Started

If you are ready to get coverage now, our online application takes less than ten minutes.

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Calie Brummer
Head of Digital Communications
Calie Brummer is a staff writer and Head of Digital Communications at Quility Insurance with a focus on financial well-being and life insurance solutions.