How Do I Know What Life Insurance I Need? 
The answer to your question has many parts to the final answer . Let 's assume I just got married and my phone has been ringing incessantly with insurance agents pedaling their life insurance policies . My wife and I know it just makes good sense to have life insurance-my policy covering her and vice versa . The question is given my occupation and I do not want her to work how do I plan `` how much '' life insurance ? My employer can provide $ 50,000 for me and I am not taxed as long as I stay at or below $ 50,000 . So from a cost standpoint that $ 50,000 is a given . I hope to have two children to keep my wife happy and raising kids . We know it takes a huge amount to just raise the kids much less educate them . We also know if I am smart at some point in my life I will be smart to have saved enough money to get out of the life insurance market and have savings to pay any funeral costs that may arise . So on today 's date I know my `` insurance needs '' is at the highest point it will ever be assuming the two children are born and then we can avoid the `` steamy ` Saturday and be careless and now the third is here . So if I assume the first child will be born in two years that means in year 20 I have to have `` college expense '' funds '' . Is it a better investment to use life insurance or it better to open a mutual fund aggressive growth and invest a $ 100 pewr month for the next 20 years ? Let 's assume the second child in born in our fourth year of marriage . Now the same decision outlined above is with me again . What is often overlooked is the assumption is I will remain healthy and my income will increase each year . What happens if I become ill and diabled for two years ? What disablity insurance plans do I have ? Do they cover my `` own occupation '' or if I can flip hamburgers I am not considered disabled . In order to make an informed decisions you have to consider all the options . Is it best for me to take a Gerber Life insurance policy on each child for $ 20,000 , which then doubles , at their age 18 ? If I am confident that I can save sufficiently for the next 30 years I may decide to take a $ 1,000,000 30 year term policy but if I am not confident of my ability to save then I am sure going to use the `` dollar cost averging '' advantages of having a `` cash value '' policy and a mutual fund in the aggressive growth and invest $ 100 per month . I ho ; pe this helps you to see the complexity of your question . 