How Much Life Insurance Should I Buy?

According to InsurEye, most Canadians buy life insurance policies under $500,000, and 31 per cent of them choose life insurance between $100,000 and $249,999.

When determining how much life insurance you should buy, your annual income is a primary consideration. Applicants who earn a higher income generally require higher amounts of insurance, but this is only one of the variables.

Another primary consideration is how old your dependents are. All things being equal, the younger your children, the more life insurance you need because your younger children will require your life insurance for a longer period of time.

But there are further factors you must consider, including what percentage of your income your family needs in order to sustain your expenses when you die. These expenses may include your mortgage, lines of credit, money you want to leave for your children’s education, an emergency fund, and final expenses.

We have built a calculator that walks you through all the possible variables, which you can find here. It’s an easy and accurate way to determine how much life insurance you need, and it takes less than five minutes to complete. These five minutes could be the most valuable you’ve ever spent. 

Most recent articles

Your email address will not be published. Required fields are marked *

  • LSM Insurance
    April 22, 2013 at 4:37 pm

    Thanks for your comment Paul. You make a good point about low interest rates impacting how much life insurance people need. $500,000 invested at 2% does not generate nearly as much as it does at 6%.

  • Paul J
    April 22, 2013 at 4:30 pm

    I’m always amazed at the number of people who say I don’t need life insurance I have coverage through work already.

    Do these people understand that $50,000 of group coverage won’t cut at. Factoring in today’s interest rates which are hovering around a whopping 2% the average breadwinner needs well over $1M in life insurance. The problem is all these website advertising life insurance for $15 a month, that simply isn’t going to cut it for most families. I realize times are tight but just imagine how much tighter it would be for your family if you were dead. Financially speaking.