List the costs you want covered
Estimate the annual income your household would need and the number of years it would need it. Add any mortgage or other debts you want to clear, education costs and final expenses. If you plan to pay off the mortgage, remove the mortgage payment from the ongoing income estimate.
Subtract money already available
Count savings you intend to leave for these needs and life insurance that would still be in place. Ask what happens to group coverage if you change employers. Include unpaid work such as child care when you estimate what your household would need to replace.
Work through an example
If your family needs $45,000 a year for 10 years, that’s $450,000. Add $250,000 in debts and $50,000 in future expenses, then subtract $100,000 in dedicated savings and $100,000 of existing coverage. The illustrative gap is $550,000 before inflation or investment returns. Revisit it when income, debts or family responsibilities change.