What Determines How Much Life Insurance You Need? 
The first step is to calculate your indebtedness : mortgage , auto loans , student debt and credit cards . Then add future obligations like your childrens education , weddings and your retirement . Then theres the human value equation . Human value is defined by the gross earning power of an individual over their expected lifetime ; this should include Social Security benefits in retirement as well . That total earnings should also include an inflation rate , some underwriters use 3 % . The total sum will give you an idea of the human value you can indemnify for life insurance purposes . 