How Much Term Life Insurance Do You Need? 
Life insurance companies use formulas to determine how much term life insurance you qualify for . It is not a bad guide for determining how much life insurance you need . At younger ages , they will allow you to take out about 25 times your annual income . E.g. . If you make $ 40,000 per year , you could get about $ 1,000,000 of coverage . That factor gradually decreases to about 10 times your annual income at retirement age , even less in your old age . However , insurance companies take assets into account , so if you have many assets , you may need more life insurance than that factor indicates . 