Reddit users generally start by estimating the income replacement needed for dependents, then add debt and future expenses. A common rule of thumb is 10–15 times your annual salary, but many adjust based on specific debts and goals.
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Income Replacement
Calculate how many years a surviving spouse or children would need financial support. Multiply that period by your annual gross income to get a baseline coverage figure.
Debt and Obligations
Add current mortgages, car loans, credit card balances, and any planned large expenses like college tuition. This ensures the policy can cover outstanding liabilities.
Future Goals and Lifestyle
Consider future costs such as a wedding, business startup, or charitable donations. Redditors often include a buffer for inflation and unforeseen expenses.
Personal Factors
Age, health, and family medical history can affect premiums and coverage limits. A younger, healthy individual may afford a larger policy at a lower cost.
Reassessing Over Time
Review coverage after major life events—marriage, children, career changes—to keep it aligned with current needs.
| Coverage Factor | Typical Adjustment |
|---|---|
| Income Replacement | 10–15× annual salary |
| Debt Coverage | Sum of outstanding loans |
| Future Expenses | Add estimated costs |