Based on the examples mentioned above, when everything is added together, you will probably want a policy for $840,000 which would cover the following:
- $540,000 (to replace yearly income)
- $200,000 (for the mortgage expense)
- $100,000 (university expense)
Total = $840,000
Once you determine the required face value of your insurance company, you can start shopping around for the right policy (and a good deal).
Obviously there are other people in your life who are important to you and you may wonder if you should insure them. As a rule, you should only insure people whose death would mean a financial loss to you. If you have a spouse or partner that also is a contributor to the family income, then it would make sense to go through the same exercise to determine the face value of the policy.