Is life insurance through work enough?

Almost never. Most group policies pay one to two times salary, which is $75,000 to $150,000 on a $75,000 income, against a $1,030,000 gap, and the coverage ends when the job ends. Fifty-five percent of working adults have coverage through their employer, and for many it is the only policy they have, which leaves them $880,000 short.

Who does not need life insurance?

A single person with no dependents, no debts, and enough savings to cover the funeral; a retiree with no dependents, a paid-off house, and savings that exceed the debts; or a family whose assets already cover the DIME total, so the gap is zero or negative and the calculator's verdict is COVERED.

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The protection ledger · Table No. 46

Do I Need Life Insurance?

Would anyone be financially worse off if you died tomorrow? If the answer is yes, you need life insurance, and the amount is the DIME total minus what you already have, which is $1,030,000 on the defaults. This article runs the test, prices the stay-at-home parent, and states who does not need it.

Filed November 3, 2026 · figures checked against 2026 sources

The one-question test

Do you need life insurance? The test is one question: would anyone be financially worse off if you died tomorrow? If the answer is yes, you need it, and the amount is the DIME total minus what you already have, which the calculator on this site prices. If the answer is no, you do not need it, and the money is better spent elsewhere, and the rest of this article is about how to answer the question honestly, because the answer is not always obvious, and the people who get it wrong are the people who buy too little, or who buy nothing, or who buy when they do not need to. The question is not whether you are young or old, healthy or sick, rich or poor. It is whether someone depends on your income, or on your unpaid work, or on your debts not falling on them, and the dependents are the need, and the need is the coverage, and the coverage is the amount the DIME method returns.

The dependents are the first category, and they are the most obvious: a spouse who depends on your income, children who depend on it, a parent you support, or anyone else whose rent, food, or schooling is paid from your paycheck. Ninety-two million American adults need life insurance or need more of it, per LIMRA's 2026 Insurance Barometer, and the need is highest among households earning under $50,000, at 54 percent, and among Gen Z, at 45 percent, which is the group that can buy it cheapest and owns it least, with only 44 percent owning any policy. The second category is the debts: a mortgage that the family could not pay without your income, a car loan, student loans, or credit cards, and the debts are the line the DIME method lists first, because they do not die with you, and the family inherits them, and the coverage that clears them is the coverage that keeps the family in the house. The third category is the co-signed loan: a student loan you co-signed for a child, or a loan you co-signed for anyone, because the co-signer becomes the borrower on your death, and the coverage that pays it is the coverage that keeps the child from inheriting your signature.

The stay-at-home parent, priced properly

The stay-at-home parent is the dependent most families miss, because the parent earns no income, and the DIME method starts with income, and the income is zero, so the method returns zero, and the family concludes the parent needs no coverage, which is wrong, because the parent's work has a replacement cost, and the replacement cost is the price of the care and the household work the parent does for free. Child care alone for one infant runs $15,600 a year at the national benchmark, per the child care calculator on this site, and the household work on top of it, the cooking, the cleaning, the driving, the scheduling, and the sick days, is worth more, and the family that loses the stay-at-home parent has to buy all of it, which is the reason the DIME method should be run on the replacement cost, not on the income, for a parent who earns nothing. Enter the replacement cost as the income to replace, $40,000 or $50,000 a year for the years the children need care, and the calculator returns the coverage the family would need to buy the work back, which is the honest answer for a parent whose work is unpaid, and whose death would cost the family more than a funeral.

The same logic applies to any unpaid work that would have to be bought if the person died: the adult child who cares for an aging parent, the spouse who manages the household while the other earns, or the partner who runs the family business without a salary. The income to replace is not the salary. It is the cost of replacing what the person does, and the DIME method prices it the same way, by multiplying the annual replacement cost by the years it would be needed, and adding the debts, the mortgage, and the education, and subtracting what is already there. The stay-at-home parent with two young children, a $250,000 mortgage, and $20,000 of debt, replacing $50,000 a year of care and household work for ten years, needs $500,000 plus $250,000 plus $20,000 plus $200,000 of education plus $10,000 of final expenses, which is $980,000, minus the savings and the existing insurance, which is the gap, and which is the amount the family should buy, even though the parent earns nothing, because the parent's work is worth $980,000, and the family would have to buy it back.

Who does not need it

Not everyone needs life insurance, and the people who do not need it should not buy it, because the premium is money spent on a risk that does not exist. A single person with no dependents, no debts, and enough savings to cover the funeral does not need it, because nobody would be worse off, and the $10,000 of final expenses is the only line, and the savings cover it. A retiree with no dependents, a paid-off house, and savings that exceed the debts does not need it, because the need is gone, and the calculator on this site returns zero for that profile, with a gap of negative $540,000 on the example in the age article, which is the amount the family is over-covered by its assets. A young adult with no dependents and no debts does not need it, though a small policy for the final expenses is cheap, and the $25,000 that covers the debts and the funeral costs a few dollars a month, which is the amount to buy if the family would otherwise pay for the funeral out of pocket. The test is the question, and the question is whether anyone would be worse off, and if the answer is no, the premium is better spent on the emergency fund, or the debt, or the retirement account, which are the needs that exist.

The second group that does not need it is the family whose assets already cover the need, because the DIME total minus the savings and the existing insurance is zero or negative, and the gap is the answer, and the answer is zero, which is the calculator's verdict, COVERED, and which is the outcome to celebrate, not to insure against. The third group is the person whose only dependent is a spouse who earns as much and could carry the household alone, though the mortgage and the debts still matter, and the DIME method still prices them, and the coverage that clears them is still worth buying, because the spouse who could carry the household alone would rather not carry the mortgage alone. The test is not whether the family would survive. It is whether the family would be worse off, and the family that would be worse off by $1,030,000 needs the coverage, and the family that would be worse off by nothing does not.

The group policy that fails the test

The most common reason people think they are covered when they are not is the group policy through work, which pays one to two times salary, and which is the only policy most people have. Fifty-five percent of working adults say they have life insurance through their employer, per the 2025 Barometer, and for many of them the group policy is the only policy they have, which means their coverage is $150,000 against a $1,030,000 gap on this site's defaults, and they are $880,000 short, and they do not know it, because the group policy feels like coverage, and it is coverage, but it is one-seventh of the coverage they need. The group policy fails the test in two ways: it is too small, because one to two times salary is a fraction of the 10 to 12 times the DIME method usually returns, and it is temporary, because it ends when the job ends, and the job ends when the family is least able to replace the coverage, because the income has stopped too. The group policy is a supplement, not a plan, and the household that counts it as the plan is counting $150,000 against a $1,030,000 gap and calling the difference covered.

The second most common reason is the belief that the cost is unaffordable, which is the overestimate, and which is the reason cost is the top reason people give for not buying, at 46 percent, though three-quarters of adults overestimate the true cost, and healthy adults 35 and under overestimate it by 7 to 12 times, per the 2025 Barometer. A healthy 35-year-old man pays about $76 a month for $1,050,000 of 20-year term, and a woman about $61, which is less than a tank of gas, and which is the correction to the overestimate, and which is the amount that closes the $1,030,000 gap. The third most common reason is the belief that the need is small, which is the 10-times rule, and which understates the need by $280,000 on the defaults, because the flat multiple ignores the mortgage and the education, and the DIME method prices them, and the gap is $1,030,000, not $750,000. The three reasons are the three ways people fail the test, and the calculator on this site is the correction to all three, because it prices the need on your obligations, and the premium on the published table, and the gap on the subtraction, and it returns all three in the time it takes to type them.

The new insight

The question is not whether you need life insurance. It is whether anyone would be worse off if you died tomorrow, and the answer is the coverage, and the coverage is the DIME total minus what you already have, and the DIME total is $1,230,000 on the defaults, and the gap is $1,030,000, and the premium is $76 a month. The people who fail the test are the people who count the group policy as the plan, at $150,000 against a $1,030,000 gap, and the people who believe the cost is seven times what it is, and the people who buy by the 10-times rule and come up $280,000 short, and all three are buying a feeling instead of a number, and the number is the gap, and the gap is $1,030,000, and the premium is $76 a month, and the family that buys it is buying the exact amount its people would be short, while the family that does not is leaving a $1,030,000 hole in the budget for the people who would inherit it. Run the test, price the gap, and buy the term, because the term is the protection, and the gap is the answer, and the answer is the amount your family would actually be short.

How to decide, in practice

The practical way to decide is to answer the question, and then to price the answer, and then to buy the term, in that order, and to write the three numbers down, because the decision is hard to hold in the head and easy to hold on paper. Answer the question: would anyone be financially worse off if you died tomorrow, and who, and by how much, and the answer is the list of dependents, debts, and co-signed loans, and the list is the need. Price the answer with the calculator on this site, on your income, your debts, your mortgage, and your children, and write the DIME total, the gap, and the recommended coverage, and the premium, which on the defaults is $1,230,000, $1,030,000, $1,050,000, and $76 a month. Buy the term that covers the years someone depends on you, which the calculator suggests from the youngest child's age, and get three quotes, because the published table is the average of 11 insurers, and your own price will be higher or lower, and the quote is the only price that matters, and the quote is free. The household that answers yes, prices the gap, and buys the term has its answer, and the household that answers no has its answer too, which is to spend the premium on the emergency fund, or the debt, or the retirement account, which are the needs that exist, and which are the needs the test was built to find.

Sources

LIMRA and Life Happens, 2026 Insurance Barometer Study (fielded January 2026, 5,237 adult financial decision-makers): 92 million U.S. adults need life insurance or more coverage; 52 percent own at least one policy; 38 percent have a need-gap; need highest among households under $50,000 (54 percent) and Gen Z (45 percent); Gen Z ownership 44 percent, the lowest of any adult generation. LIMRA and Life Happens, 2025 Insurance Barometer Study: 55 percent of working adults have coverage through their employer; 61 percent of non-owners say they need it; three-quarters of adults overestimate the true cost; healthy adults 35 and under overestimate by 7 to 12 times; cost is the top reason for not buying, at 46 percent. Policygenius Life Insurance Price Index, 20-year term, $500,000, preferred non-smoker: men $29 a month at 30; women $23 at 30. Child Care Aware of America, Child Care in America: 2024 Affordability Analysis: center care $300 a week for an infant, $15,600 a year. National Funeral Directors Association, 2024 General Price List Study: median funeral with viewing and burial $8,300. All calculator figures were computed by this site's calculator under the stated model.