How much term life insurance does a new parent need?

The arrival of a baby is when most people buy life insurance for the first time, and it's also when the "how much" question feels most confusing. Here is the method we use, with the reasoning behind each number, so you can size a policy in about ten minutes.

Start with the job the money has to do

Life insurance isn't a lottery ticket or an inheritance. For a new parent it has one job: if you die while your child still depends on you, the money replaces what you would have provided until they don't. Everything below flows from that sentence.

That framing also tells you what the policy doesn't need to do. It doesn't need to make anyone wealthy, fund a retirement, or last forever. It needs to cover a specific window of years, which is exactly what term life insurance is designed for.

The four numbers

Years of income to replace. Count from now until your youngest child would reasonably be independent. For a newborn, that's around 20 to 25 years. Some parents shorten it to "until they finish high school"; some extend it to cover a surviving spouse's retirement gap. Pick the number you'd be comfortable explaining to your partner.

Your annual income. Use your take-home contribution to the household, not just your salary. If you're the parent who stays home, don't put zero here: the cost of replacing childcare, cooking, transport, and everything else you do is real money that a surviving partner would have to pay for. A reasonable stand-in is what full-time childcare plus household help would cost in your area.

Debts and future costs. The remaining mortgage balance is usually the big one, followed by car loans, student loans, and credit cards. Then add what you'd want set aside for education. You don't have to fund a private university; a figure that keeps the option open is enough.

What you already have. Subtract life insurance through work, any existing policies, and savings you'd be willing to count. Be careful with the workplace number: group coverage is usually one or two times salary, and it ends when the job does. Count it, but don't lean on it.

Cost is the usual reason people delay. According to LIMRA's June 2025 release, adults aged 18 to 30 overestimated the cost of a $250,000, 20-year term policy by roughly 10 to 12 times its true price, and 40% of U.S. adults, about 100 million people, say they need life insurance or more of it. The application shows you the real number for your age and health before you commit, which is the fastest way to replace a guess with a fact.

Putting it together

Income multiplied by years, plus debts and education, minus existing coverage. For a household earning $85,000 a year with a $350,000 mortgage, $100,000 set aside for education, and $100,000 of coverage through work, twenty years of income replacement comes to about $2 million of coverage. That number surprises people, and it's worth sitting with why: it isn't a windfall, it's twenty years of a paycheck arriving on schedule.

If the figure feels out of reach, the right move is to shorten the years or trim the extras rather than skip coverage. A policy that covers fifteen years of income is enormously better than no policy while you wait to afford the perfect one. You can also stack: a larger policy now and a second smaller one later, or the reverse.

Both parents, not one

The most common mistake is insuring only the higher earner. If the other parent died, the survivor would face the same childcare and household costs while trying to keep working. Run the numbers for each of you separately; they will be different, and both will be larger than zero.

How long should the term be?

Match it to the years you chose in the first step. A 20-year term for a newborn covers them through college age; a 25- or 30-year term adds a margin for a second child or a longer runway. Longer terms cost more per month, but the price is locked in for the whole term, and buying at a younger age is the single biggest factor in what you'll pay. If you're unsure, a longer term is usually the safer error.

What to do next

Use the estimator on our home page to run your own four numbers. It rounds the result and suggests a term length. Then, when you apply, you'll see the actual monthly price for that amount before you commit to anything, and you can adjust the coverage up or down on the spot.