Two ways to answer "how much life insurance is enough?"

Human life value approach: estimates the economic value of the insured's future earnings. Inputs: after-tax income, inflation, years left to work, and the time value of money (future income discounted to today). It is a projection of income.

Needs approach: asks what the family would need if the insured died today. Mnemonic DIME: - Debt: credit cards, car loans and other debts. - Income: income replacement for the family for a number of years. - Mortgage: pay off or pay down the home loan. - Expenses: education, funeral, emergency fund. Then subtract existing resources such as savings and current coverage.

Remember the Social Security blackout period: a surviving spouse caring for the deceased worker's child gets mother's or father's benefits only while the child is under 16 (or disabled). Widow(er) benefits based on age start at 60 (50 if disabled). The years in between, with no Social Security check, are the blackout period, a need the plan should cover.