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Estimate Your Life Insurance Needs
by Kimberly Lankford

I just had a baby and realize that I finally need to get life insurance. Is there a rule of thumb to help me figure out how much to buy?

The basic rule of thumb is 8 to 12 times your income, says Bob Bland, CEO of insurance brokerage Insure.com. Stick to the higher end if you're the sole breadwinner with young children; the low figure may be enough if both spouses work and you've paid off most of the mortgage or have money for future college tuition payments.

For a more accurate number, add up your family's expenses, subtract sources of income available after you die and buy enough life insurance to make up the difference. Our life insurance needs calculator can help you with the math.

That's also the best way to calculate how much insurance you need on a stay-at-home parent, who may not earn an income but would cost you a lot of money in child care and other expenses if anything happened to them.

For more insurance-buying tips, see Shop Around for the Best Rate. Since you have a new baby, you'll probably want to buy a 20-year or 30-year term policy, which guarantees that your rates won't rise until your child has at least started college. For help figuring out how long a term you should get, see Match Insurance Term to Your Needs.