When you choose to buy life insurance, you are taking a big step to ensure your loved ones’ financial security after your death. While it is usually an easy decision to get coverage, determining how much coverage you need might be trickier.

Your life insurance needs to be able to address the most pressing financial needs of your survivors when you are no longer there to provide for them. Ask yourself the following questions to help you determine what dollar value these needs represent.

What is your income?

Upon your death, your family will no longer have access to the paycheck (be it retirement benefits or standard pay) that you brought in. As a rule of thumb, you want your life insurance to replace this value for several years. Most insurers recommend that you purchase ten years’ worth of your regular salary. So, if you make $70,000/year, then you need at least $700,000 worth of life insurance.

What is your cost of living?

Besides income itself, you also must consider how much it costs your family to maintain their lifestyle. If you live in New York City, for example, then your cost of living is going to be a lot higher than it would be in a rural community. In any case, if your family relies on two incomes to make ends meet, then it is important to ensure that they will still have access to that money. For this reason, a higher life insurance benefit might be necessary.

Do you have children or dependents?

Having a child, or even a dependent adult, in your care increases your need for life insurance. If you were to pass away unexpectedly, then this person might not be able to take care of themselves or pay for the care they deserve. Therefore, your life insurance settlement needs to be able to cover the expenses of the dependent for the rest of their life, if necessary.

Are both partners working?

Even if both partners in a relationship work, the surviving partner can still benefit from the deceased partner’s life insurance. There will be final expenses to settle, and the surviving partner might still need to cover ongoing expenses like a mortgage.

Furthermore, even if the deceased party was not employed, that does not mean that they did not contribute value to the household. For example, the death of your spouse might require you to pay for childcare, housekeeping or further living costs that this person previously provided for free.

When in doubt, choose a larger policy. Life insurance is usually quite affordable, and you will also have peace of mind knowing your loved ones are not burdened financially. You need to create an estate plan that way, when you die, it tells the executors where the life insurance money should go