Do You Have Enough Life Insurance? A Guide for Every Stage of Life
September 2025
Life insurance often feels like one of those “I’ll get to it later” tasks. Yet, few decisions have a greater impact on your family’s financial security.
The right amount of coverage not only helps pay for expenses in the event of your passing—it can also protect your loved ones from financial disruption, preserve long-term goals, and provide peace of mind.
But how do you know if you have enough? The answer depends on where you are in life, what you want to protect, and the legacy you hope to leave behind.
Frequently Asked Questions
Q: How do I know if I have enough life insurance?
A: Start by estimating your family’s expenses without you—mortgage, debts, living costs, education, and future goals—then subtract existing assets or coverage. A common rule is 7–10× your income, adjusted for your unique situation.
Q: Should I choose term or permanent life insurance?
A: Term insurance is affordable protection for temporary needs like income or mortgages, while permanent insurance lasts a lifetime and builds cash value for legacy and retirement goals.
Q: How often should I review my coverage?
A: Review your policy whenever you experience a significant life change—marriage or divorce, the birth of a child, buying a home, starting a business, or retiring.
Q: Can life insurance proceeds be taxed?
A: Generally, death benefits are not included in your beneficiary’s gross income. However, any interest received is subject to taxes and must be reported.1
Why Life Insurance Matters
At its core, life insurance is about protection—making sure your loved ones stay financially secure if the unexpected happens. Beyond covering immediate needs, such as income replacement or mortgage payments, it can also help safeguard a family business or build a lasting legacy for future generations. As you weigh your options, consider three key dimensions:
Career: How much income would need to be replaced if you weren’t here? Consider your salary, bonuses, and benefits (like healthcare coverage that your family would lose).
Family: Who relies on you? Spouses, children, aging parents? Factor in not just today’s needs, but future milestones such as college tuition, weddings, or long-term care support.
Wealth Goals: Do you want to simply replace income, or also protect assets, reduce estate taxes, or create a generational legacy? Your goals influence whether term insurance is sufficient or whether permanent policies with cash value make sense.
Early Career: Building a Safety Net (20s-30s)
When you’re just starting out, your income may be modest, but your future earning potential is your greatest asset. Even if you don’t yet have a spouse or children, a small policy can cover student loans, personal debts, or funeral expenses—ensuring your family isn’t left with a financial burden.
Key questions:
- Who depends on my income?
- Do I have debts or cosigned loans that could fall to others?
- Would my family be able to manage end-of-life costs without hardship?
Coverage focus: Term life policies are often the most cost-effective choice, and this is an opportunity to lock in affordable rates while you’re young and healthy.
Growing Family: Protecting Dependents (30s-40s)
As your career advances and your family grows, so do your financial responsibilities—mortgage payments, childcare, education savings, and daily living costs all depend on your income. At this stage, life insurance should provide enough coverage to replace your earnings so your loved ones can maintain their lifestyle and acheive your shared goals.
Coverage focus: Aim for a policy that covers 7–10 times your annual income, adjusted for outstanding debts and future expenses like college tuition. Consider layering policies of combining term with permanent insurance.
Peak Earning Years: Safeguarding Assets and Legacy (40s-50s)
In midlife, you’ve likely started building wealth—whether through investments, retirement accounts, or a business. Your insurance needs often shift from simply replacing income to protecting assets and planning your estate. Life insurance can provide liquidity to cover estate taxes, fund business succession, and help balance inheritances among heirs.
Key considerations:
- Do I have strategies in place to transfer wealth efficiently?
- Could my family be forced to sell assets to cover taxes or debts?
- How can insurance support my long-term legacy goals?
Coverage focus: Permanent insurance can provide tax-advantaged cash value growth and estate planning benefits.
Pre-Retirement & Retirement: Ensuring Continuity (50s-70s)
At this stage, your children may be financially independent and your debts are likely reduced. Still, life insurance can play a meaningful role—whether to leave a charitable legacy, support a surviving spouse or grandchild, or cover healthcare and final expenses.
Coverage focus: Permanent policies with long-term care riders can add value, and many retirees use them as a tax-efficient tool for wealth transfer.
Ready to Get Started?
Life insurance isn’t a one-time decision—it’s a living plan that should evolve as your life changes.
Whether you’re just beginning your career, raising a family, reaching peak earning years, or enjoying retirement, the right coverage ensures your loved ones—and your legacy—are protected.
We can help you run the numbers, evaluate different policy types, and integrate insurance into your overall wealth strategy.