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How much life insurance do I need?

When you buy a life insurance policy, it’s important to get the right amount of coverage. If you buy too little, you could leave your loved ones in a tough financial spot. And if you buy too much, you’ll be paying for coverage you don’t need. That’s why asking yourself “How much life insurance should I buy?” is a critical part of the process.

Fortunately, by answering the following questions, you can better estimate how much life insurance coverage you may need based on your individual situation. How much of your income will your loved ones need to replace and for how long? Does anyone besides you rely on your income? If you were to die tomorrow, how would the people who depend on your paycheck for financial support make ends meet? Your first consideration should be how much money your loved ones will need if you were suddenly gone, multiplied by the number of years that they’ll need that money.

How much debt are you carrying?

Does your income help pay the mortgage, car payment, education loans, etc.? Consider including the remaining balance of any outstanding debts in your projected policy total so that these debts don’t become a burden for your loved ones.

How will your family pay for your final expenses?

The median cost of a basic funeral in the U.S. is $8,508.1 If you haven’t set aside the funds to cover these immediate expenses — as well as any outstanding medical bills you may leave behind — factor funeral and other final costs into your life insurance needs.

What assets and income do you have?

Add up your savings and investments, and factor in any other sources of income that you may have. Include any life insurance coverage you have through your employer. Then, subtract the total of this amount from your projected total life insurance needs.

These questions are only a starting point. Depending on your situation, you may need to consider other factors when calculating your life insurance coverage needs.

Want an even quicker and easier way to estimate how much life insurance to buy? Simply use our Life Insurance Needs Calculator and quote tool. All you need to do is input some basic information, and our calculator does the rest. In just a few minutes, you’ll have a general idea of your coverage needs and the cost of that coverage.


Get your free quote today →


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Need help?

Contact Member Support today. We’ll be happy to assist you. Call 1-844-740-5433 Opens phone handler.


Acceptance for coverage and pricing is subject to eligibility and underwriting criteria. Member Advantage Life (ICC16-TL21/TL-21), is a term life insurance policy issued exclusively to Costco members by Protective Life Insurance Company (PLICO), Brentwood, TN. Not available in New York. Policy form numbers, product features and availability may vary by state. Consult policy for benefits, riders, limitations, and exclusions. Coverage and pricing is subject to eligibility and underwriting criteria. Up to a two-year contestable and suicide period. Benefits adjusted for misstatements of age or sex. In Montana, unisex rates apply. Any quote that is present is only an estimate and the actual premium and rate class will be determined after the underwriting process is completed. Costco Insurance Agency, Inc. and Costco Wholesale do not issue, underwrite insurance or pay claims under PLICO policies. Insurance is underwritten by PLICO.

Costco Insurance Agency, Inc. (CIA), a licensed insurance agent, may receive compensation from PLICO and/or its affiliates. CIA and its affiliates do not guarantee the services of any insurance company. PLICO and its affiliates are separate, independent of and distinct from CIA. CIA is not responsible for the financial condition or obligations of PLICO. The California license number for Protective is 07726. The California license number for Costco Insurance Agency is 0D08407.