How Much Life Insurance Do You Really Need?

The needs-based calculation

A proper calculation starts with the gap your death would create and works backward. It's more accurate than any rule of thumb — and not much harder to do.

• Income replacement: how many years of your income would your family need, at what standard of living?
• Debt payoff: mortgage, lines of credit, and any other obligations you don't want to leave behind.
• Future goals: children's education, a spouse's retirement, planned major expenses.
• Final expenses: funeral, legal, and estate settlement costs.

Then subtract what you already have

Your existing coverage matters. Employer group life, personal policies already in force, RRSP/TFSA balances, and other liquid assets all reduce the gap. The number you need is the difference — not the gross. Many families discover they're underinsured; some discover they're overinsured and paying for coverage they no longer need.

And factor in your stage of life

A family with young kids, a new mortgage, and one income needs more coverage than an empty-nester whose mortgage is paid off. Your needs change as life changes — which is why the right amount at 30 may be too much at 55. We revisit the calculation at every major milestone: a new home, a new child, a career change, and especially as the mortgage shrinks.

The right number, not a number

The goal isn't maximum coverage — it's right-sized coverage. Enough to protect your family without paying for protection you'll never use, structured to shrink as your needs shrink. We walk every client through a real needs analysis, grounded in their actual numbers, so the amount on the policy matches the reality of their life. That's how insurance earns its place in a financial plan.