How Much Should You Spend On Life Insurance? 
Some financial counselors recommend spending a certain percent of your income on life insurance . However , there are so many different uses for life insurance , and the price varies so much based on age and health and the type of policy purchased , that it does n't always work to use a rule of thumb . If you are a retired person with a high income and net worth , you may want to purchase life insurance to avoid and/or pay estate taxes , and to transfer your wealth to your heirs . The cost of this type of policy could be pricey , but it would save you a lot of money . In contrast , you may be a young newlywed who can only afford to spend only $ 20 per month on life insurance . This could possibly buy $ 250,000 of term insurance for you and your spouse . At that time in your life , that expenditure would be appropriate . 