Use the present-value income method to calculate your exact life insurance coverage gap — accounting for income replacement, debts, college costs, and existing assets.
The present value method calculates how large a lump sum today, invested at a modest return, would generate enough income to replace your earnings for the required number of years. For a family with dependents, the standard recommendation is coverage equal to 10–12× annual income, though the PV method is more precise. Term life insurance is the most cost-effective for most families — a $1M 20-year policy costs ~$35–50/month for a healthy 35-year-old.