There are numerous ways to estimate the amount of life insurance you need. Insurance companies often recommend insuring six to ten times the amount of your annual salary. Another way is to calculate your long-term obligations and subtract your assets, with the remaining gap representing the amount the insurance should cover. Naturally, the equation depends on your financial responsibilities.
If you don’t have a spouse or dependents to support, you might opt for a small policy that simply covers your funeral and end-of-life expenses. If you have a spouse or dependents, you’ll want to ensure that their needs are cared for as long as necessary.