The conventional approach is to go through a "needs analysis". This method attempts to determine the minimum acceptable amount of coverage you "need" in order to meet your stated objectives, such as final expenses, college costs, mortgage payoff, emergency fund, etc. It is a math calculation based on your estimate of variables such as inflation, taxes, and rate of return.
A more meaningful approach is to simply decide how much of your income you want to continue to your family when you die and for how long. After all, it's your income that ultimately pays for all the individual items mentioned above. Then, an amount of coverage can be calculated based on the same assumptions as in the needs analysis.
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A more meaningful approach is to simply decide how much of your income you want to continue to your family when you die and for how long. After all, it's your income that ultimately pays for all the individual items mentioned above. Then, an amount of coverage can be calculated based on the same assumptions as in the needs analysis.