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How Much Life Insurance *Should* I Have?

How Much Life Insurance *Should* I Have?

February 03, 2020

Dave Ramsey suggests everyone should have 10x their annual income in life insurance. While that's a good rule-of-thumb, the process by which we determine this amount is more intricate and detailed. Here's a look at four major factors used to determine how much life insurance someone needs.

{AUDIO} How Much Life Insurance *Should* I Have?


One of the first things we consider is a person's debt load. We will look at how much debt they have as well as the kind of debt. For example, is the debt consumer loans, students loans or farm/business debt?

Income Sources

Secondly, we look at the amount of income someone makes combined with the number of income sources they may have. For example, do both spouses work or is one spouse able to work and generate sufficient income in the case of death?


Next, we look at the number of children or dependents involved. Generally speaking, the more dependents someone has, the more life insurance they may need depending on the ability to produce income and debt load.


Finally, we will look at the person's age. Here we are looking for three things: time until retirement, time until the person becomes self-insured, and/or a young person's ability to get life insurance at a low cost.

All of these criteria cross-thread into the life insurance analysis. If you need help determining just how much life insurance you need, please call 320.222.4236 or email me directly at