Some things to consider:
- Annual Income – How much does your family currently need to survive, and how much of that is your income relied on to cover?
- Spouses Age – How old is your spouse and how long will they need the life insurance benefit to supplement their income?
- Children – How many children? What ages? Will they need child care? Do you want to provide for college tuition?
- What debts do you have? Mortgage? Taxes? Loans?
- How much will your final expenses cost?
Answering these questions will get you in the ballpark for what your true life insurance needs are currently. Multiply this figure by 1.5% per year of coverage. So a 20 year term would be multiplied by 30% to adjust for inflation in future years. Also, it may be wise to purchase multiple policies for different obligations. For example if you desire to provide your child with a $100,000 of college tuition and she is 15, it may make sense to purchase a 10 year term for that specific expense. This will help limit premium while covering all your needs for the time they exist. Even if the amount of insurance you need is too costly, purchasing what you can afford is better than none at all.