LIMRA published its 2025 Insurance Barometer Study in April 2025. It found that 51% of American adults report owning some form of life insurance, and that 40% of adults believe they need more coverage than they currently hold. LIMRA puts the number of Americans without adequate coverage at roughly 100 million.
The same study asked households what would happen if the primary wage earner died. Nearly half, 47%, said they would have trouble paying living expenses within six months. Forty percent said their loved ones would be barely or not at all financially secure.
Bryan Hodgens, senior vice president and head of LIMRA research, described the gap this way: “The good news is that 54 million Gen Z and Millennial adults recognize their need for life insurance. Yet, there appears to be some ‘too good to be true’ thinking that complicates their purchase decisions.”
Recognizing the need is not the same as sizing it. The amount is arithmetic, and the arithmetic has four parts.
If you would rather see the arithmetic move as you type it, the coverage calculator runs the same method on this page and nothing you enter is sent anywhere.
What goes into the number?
Start with what the death of an income would leave behind, not with a multiple of salary.
Debt that survives you. A mortgage balance, a home equity line, car notes, private student loans that were co-signed, and any business debt personally guaranteed. Federal student loans in the borrower’s own name are discharged at death. Most other debt is not.
Income the household still needs. Not a lifetime of salary. The number of years until the youngest dependent is self-supporting, or until the surviving spouse reaches retirement age, whichever is longer. A household that needs $60,000 a year replaced for twelve years is looking at $720,000 before anything else is counted.
The cost of the work that stops. Childcare, school pickups, cooking and the rest of it get paid for by somebody after a death, in money or in hours.
Money already in place. Group coverage through an employer, an existing individual policy, retirement accounts and savings all come off the total. LIMRA reports that 55% of working adults have some coverage through an employer, and that coverage usually ends when the job does.
Does a stay-at-home parent need coverage?
Insure.com published its 2025 Mother’s Day Index in May 2025, pricing the work a stay-at-home parent does against Bureau of Labor Statistics wage data for each job. The total came to $145,235 for the year, up 4% from $140,315 in 2024, an increase of $4,920.
The childcare line by itself was $33,134. Cooking was $12,478. Housekeeping was $9,043. Driving was $8,794. Those four items alone total $63,449 a year that a surviving spouse has to cover with money, with time off work, or with family.
A household with a $145,000 annual gap and eight years until the youngest child is in high school is not a household with no insurable interest. It is a household where one of the two people carrying the load has no policy on them at all.
What does Social Security actually pay?
The Social Security Administration pays survivor benefits to a qualifying spouse, divorced spouse, child or dependent parent based on the deceased worker’s earnings record. Those are monthly benefits and they matter.
The one-time payment is smaller than most people expect. The SSA states that “a one-time lump sum death payment of $255 can be made to a qualifying spouse or child,” and that “survivors must apply for this payment within 2 years of the date of the number holder’s death.”
Two hundred and fifty-five dollars does not bury anyone. It is worth knowing the figure before a family plans around it.
How much of it should be term?
Most of the gap described above is temporary. The mortgage amortizes. The children finish school. The surviving spouse reaches retirement age and the retirement accounts start working. A need that ends is a need that term insurance is built for, and term is the cheapest way to carry a large face amount through the years the household is most exposed.
What does not end is the part of the estate you intend to leave behind, the final expenses, and any obligation that outlives the mortgage. That part is what permanent coverage is for, and it is usually a smaller face amount held for much longer.
Most families we write end up with both. A large term policy sized to the years of exposure, and a smaller permanent policy sized to what they mean to leave.
What about the coverage through work?
LIMRA reports that 55% of working adults hold some life insurance through an employer, and for a large share of them it is the only coverage they have.
Three things make it a poor foundation. The face amount is usually one or two times salary, which is a fraction of what the arithmetic above produces. It generally ends when the job does, and the years people change jobs are the years they are most exposed. And a conversion right, where one exists, converts to whatever permanent product that carrier offers at whatever it costs, which is rarely the best available answer.
Count it in the subtraction. Do not build on it.
How long should the term be?
Match the term to the exposure rather than to a round number.
Count the years until the youngest dependent finishes education, and the years left on the mortgage. Take the longer of the two and buy a term that covers it. A household with a fourteen-year mortgage balance and a six year old is exposed for about sixteen years, so a twenty-year term covers it with margin and a fifteen-year term does not.
Where two needs have different lengths, two policies often cost less than one long one. A thirty-year term sized to the whole requirement pays for three decades of coverage the household stops needing after fifteen. Layering a twenty-year policy over a ten-year one, both sized to their own exposure, drops the total premium and drops it again when the shorter one expires.
Check the conversion right on whatever you buy. It lets you exchange term for permanent coverage with the same carrier without new medical underwriting, which matters enormously if your health changes. Carriers set their own conversion windows and some close well before the term ends, so the deadline belongs in the file the day the policy is issued.
When should you buy it?
The arithmetic on timing is not close. Average monthly premiums for $500,000 of twenty-year term, on 2026 published figures, run $38 for a man aged 30, $59 at 40, $137 at 50 and $395 at 60. Rates roughly double between 40 and 50 and nearly triple between 50 and 60.
Waiting does nothing except raise the price and add the risk that a health event makes the coverage unavailable at any price. Underwriting prices the person you are on the day you apply, and that is the youngest and healthiest you will be.
How often should the number be reviewed?
Not annually. On events, because events are what move it.
- A birth or an adoption
- A marriage or a divorce
- Buying a house, or refinancing into a larger balance
- A significant change in income
- Starting or selling a business
- A death in the family that changes who depends on whom
- Leaving a job that carried group coverage
Each of those changes either the amount required or who should receive it, and the second one is the more commonly missed. A designation naming an ex-spouse survives a divorce decree in many cases, which is covered in why the beneficiary form outranks a will.
Why the rule of thumb fails
Ten times income is a number that ignores the mortgage balance, the group coverage already in force, the age of the youngest child and the second earner. Two households with identical incomes can need face amounts that differ by half a million dollars.
The gap only becomes visible when everything is written down in one place. That is what a fact-finder is for, and it is why the number comes at the end of the conversation rather than the beginning.
Apex quotes every case across more than 20 carriers, and the coverage we write ranges from ten-year term to indexed universal life and annuities. If you want the arithmetic run on your own household, talk to a licensed agent.
Nothing here is an offer of coverage, and no policy is bound until a carrier issues it in writing.
