How much coverage do you actually need?
The 10× rule is a marketing shortcut. Here is the actual arithmetic your household would live through if you died tonight.
Start with what would go away.
If you died tonight, your paycheck stops on Friday. Your family still has to pay the mortgage, the daycare, the groceries, the car, the phones, and eventually the college tuition. The point of the death benefit is to keep that possible without a fire sale.
So the question isn't 'how much life insurance is normal.' The question is 'how much money would my household need to keep living the life we've already built.'
The formula, plainly.
Add these up:
- →Every debt with your name on it: mortgage balance, car loans, student loans, credit cards.
- →Your annual income × the number of years your youngest dependent still needs support (usually to age 22).
- →College, if you're planning to cover it: ~$25k/year public, ~$60k/year private, per kid.
- →A one-time buffer for funeral, legal, and 'we need a minute' cash — $20k is a safe placeholder.
- →Subtract what you already have: existing life insurance, retirement accounts your spouse could access, savings.
A worked example.
35-year-old parent, two kids (ages 4 and 6), household income $110k, $340k left on the mortgage, one car loan of $18k, no other debt. Spouse works part-time and would need to keep the current childcare setup.
Debts: $358k. Income replacement to youngest turning 22: $110k × 18 = $1.98M. College for two: $200k. Buffer: $20k. Existing 401(k): -$140k. Rough target: about $2.4M in coverage.
That sounds huge until you price it. For a healthy 35-year-old, a $2M, 20-year term policy runs roughly $55–$85/month. Less than most car insurance.
“Don't pick a round number because it sounds like a lot. Pick the number that would actually let your family stay in their house.”
When 10× income is fine.
If you're single-income with two young kids and no wild edge cases, 10–15× your gross income is a decent shortcut and will land you close to what the full math would recommend. It's a shortcut, not a lie.
If your household is more complicated — big mortgage, private school, a partner who stepped back from their career, a family member you support — do the arithmetic. It takes ten minutes and it's the whole point.