How much life insurance do I actually need?
By Reynolds Edokpayi, Zenith Advisory Inc., Saskatoon · Updated October 2026 · 6 min read
The five-part calculation
- Debts to clear. Mortgage balance, car loans, credit cards, anything your family would otherwise have to keep paying.
- Income to replace. How much your household needs each year, multiplied by the number of years until your youngest is independent. Many people use 60 to 70% of current income, since one expense (you) is gone.
- Education. Roughly $20,000 to $30,000 per child for a four-year program away from home, less whatever is already in an RESP.
- Final expenses. Funeral, legal, and a cushion: $15,000 to $25,000 is typical.
- Minus what you have. Savings, investments, existing policies, group coverage through work (remembering that group coverage ends when the job does).
A worked example
A couple in Saskatoon, one main earner on $110,000, two children aged 4 and 7, mortgage of $380,000.
That's about 11 times income, which is why the rule of thumb exists. But a family with no mortgage and grown children might need a fraction of that, and a family supporting parents abroad might need more. The calculation beats the rule.
Term or permanent?
For a need like the one above, which shrinks as the mortgage is paid and the children grow up, term insurance (20 or 25 years) is almost always the right tool and costs a fraction of permanent coverage. Permanent insurance has its uses, mainly in estate and corporate planning, but it's rarely where a young family should start.
Don't forget the second income
If your partner's income also carries the household, or they do the childcare that would need replacing, they need coverage too.
What to do
Run your own numbers through the five steps. Then let us check the result and compare prices across insurers, at no cost. Figures above are for illustration only; your situation will differ.
Want this worked out for your numbers? We'll build a plan for your family that covers the risks, the savings and the goals, and show you what to do first.