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How much life insurance do I actually need?

A step by step way to size a policy around your debts, the income your family would lose, and the coverage you already have.

Updated September 5, 2026 · 3 min read · by Gerino Alejos

Enough to clear your debts and your final expenses, then replace your income for the years your family depends on it, minus the coverage you already have. For most working parents that lands near ten times annual income. Working out your own number takes about ten minutes.

Add up what would not go away

Start with the debts that would still be owed if you died tomorrow. The mortgage balance, the car notes, credit cards, any personal loans. Then add final expenses, the cost of a funeral and burial. In South Texas that usually runs between 8,000 and 15,000 dollars.

That is the floor. A policy smaller than that leaves your family paying your bills out of their own income.

Then replace the income

The common shorthand is ten times your annual income. It is a starting point, not an answer. What you are really asking is how many years your household needs your paycheck to keep arriving.

• A parent with young children usually needs the income replaced until the youngest finishes school.
• A couple with no children and no mortgage may need much less.
• If your spouse earns about what you earn, the number drops.
• If your spouse does not work outside the home, the number goes up. Insure the work they do as well, because childcare has a real price.

Subtract what you already have

Count the group life at work, the coverage an employer provides while you work there. Add any policy you already own, and savings your family could reach quickly. Retirement accounts count only if you are willing to see them emptied at the worst possible time.

Group life is worth counting but not worth leaning on. It is usually one or two times salary, and it ends the day the job does. See what happens to work coverage when you leave.

A worked example

Say a 38 year old in Edinburg earns 55,000 dollars a year. She has a 140,000 dollar mortgage balance, two children aged 6 and 9, and 50,000 dollars of group life at work.

• Mortgage and debts: 155,000
• Final expenses: 12,000
• Income replacement for 14 years, until the youngest is 23: a conservative 550,000
• Subtract group life: minus 50,000
• Target: roughly 670,000, so a 700,000 dollar policy

That 700,000 is the face amount, the dollar figure the policy would pay. In this example she would buy it as a 20 year term policy, one that covers a set number of years and then ends.

Do not over-buy either

Watch the premium too, the monthly bill for the policy. Coverage you cancel in year three because that bill got uncomfortable protects nobody.

A policy you will keep for twenty years does more for your family than one that looks impressive and then lapses. Lapse means the policy ends because the payments stopped.

If money is tight, buy the term you can afford now and add to it later. That is usually allowed as long as you are still insurable, meaning a company will still take your application after looking at your health.

We will run the math with you

Bring your mortgage balance and your last pay stub and we can work out your number in one sitting, then compare quotes for you. Call our McAllen office at (956) 687 3334, or enter your ZIP code in the form on this page. Se habla español.

Rather talk? (956) 687 3334

How much should it pay?

The death benefit is what your family receives. Most final expense policies here run between $5,000 and $25,000.

Coverage amount

$10,000$15,000$20,000$25,000Not sure

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Licensed Texas insurance agency Local office in McAllen We don’t sell your information

Gerino Alejos

Licensed insurance agent · License 3128710 · NPN 18243381

Owner of McAllen Insurance Group, an independent agency on North 10th Street in McAllen. Works with clients across Hidalgo, Cameron and Starr counties on Medicare, Marketplace health, life and auto coverage. Se habla español.