How Much Life Insurance Do I Need? Ask This Instead

How Much Life Insurance Do I Need? Why That’s the Wrong Question

If you’ve ever asked, “How much life insurance do I need?”—you’re not alone. It’s a common starting point. But in this article, Bruce and I (Rachel) want to challenge that question and offer something better. Because “need” is often based on a survival mentality—what’s the bare minimum? But the real question isn’t about scraping by. It’s about what you want your life insurance to do—for you, for your spouse, for your children, and for future generations.

In this article, you’ll learn:

• Why a needs-based approach might be leaving your family unprotected
• How to calculate a more empowering life insurance amount
• What insurance companies actually look for (and why you can’t be “overinsured”)
• The role of Infinite Banking in maximizing death benefit and legacy
• How to think long-term, strategically, and legacy-minded when it comes to life insurance

Podcast: Play in new window | Download (Duration: 34:48 — 39.8MB)

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Why My Husband’s First Thought Was Our Life Insurance

Six years ago, I was in the ICU. My husband, Lucas, held our newborn baby girl as the doctors delivered updates that swung between hope and despair. One moment, it was “we stopped the bleeding,” the next, “this is still serious.” As he prayed through the fear and the unknown, one practical thought anchored him: We have life insurance. Not just any policy—we had as much life insurance as we could get. And in that moment, he knew he wouldn’t have to make rushed decisions or shoulder financial pressure on top of emotional trauma. That policy was our safety net, our peace of mind.

That’s why this conversation matters. It’s not just about numbers on paper. It’s about preparing for the moments you hope never come—and giving your family the ability to respond from a place of strength.

Needs-Based Life Insurance Leaves You Short

Most people approach life insurance with a checklist:

• Mortgage? Check.
• College for kids? Check.
• Debts? Check.
• Burial expenses? Check.

And that’s how traditional advisors calculate the “amount you need.” They total up obligations and say, “That’s your number.” But this method reduces life insurance to a bill-pay strategy. It doesn’t account for who you are, the value of your work, or the future your family deserves to continue building.

In the Infinite Banking world, we don’t view life insurance as just a financial parachute. We see it as a tool for opportunity, a storehouse of value, and a means to start your family ahead, not just keep them from falling behind.

The Real Question: How Much Life Insurance Do I Want?

“Need” is survival. “Want” is vision.

If your life insurance policy could fund your family’s future, preserve your estate, and launch the next generation into opportunity—how much would you want?

Bruce and I often see families with grossly underfunded policies simply because they didn’t know what was possible. Insurance companies assess what’s called your human life value—a calculation of your income, age, and potential future earnings. Based on that, they allow you to apply for a corresponding death benefit. If you qualify for $4 million in coverage, it’s because they believe your life’s economic value warrants it.

You can’t be overinsured. The carriers won’t let you.

So the real question becomes: If they’ll insure me for this amount… why wouldn’t I take it?

Income Replacement + Future Value = What You’re Really Protecting

Here’s a practical framework:

• Current net income: Say $120,000/year.
• Grossed up for taxes: Maybe $140,000/year.
• Multiply by 25 (for income over 25 years at a 4% withdrawal rate): You’d need $3.5M in capital.

Now add liabilities:

• Mortgage: $600,000
• Debts & Cars: $145,000
• College: $200,000
• Burial: $15,000
• Total additional coverage need: $960,000

That brings your total death benefit to $4.46 million.

That number may seem high. But when you think about protecting your spouse’s peace of mind, your children’s stability, and your family’s future, it makes sense. The truth? Most families are underinsured.

Death Benefit Grows with Infinite Banking

The Infinite Banking Concept (IBC) focuses on using whole life insurance as a private banking system. It prioritizes cash value, but death benefit plays a critical role too. Every time you fund your policy, you’re not just building cash—you’re growing a death benefit that:

• Increases over time
• Can be converted from term to permanent
• Funds your legacy and protects future generations

As Bruce says, “You’re chasing the death benefit.” And that’s a good thing. Because the greater your death benefit, the greater your guaranteed payout—and the more powerful your banking system becomes.

Plus, when you structure policies properly (with term riders and conversion options), you’re maximizing your insurability today and tomorrow. That means locking in coverage before health issues ever arise.

Insurability: Use It or Lose It

One of the most strategic things you can do is protect your insurability.

You only qualify for life insurance based on your health today. Tomorrow, you may not. That’s why it’s critical to:

• Buy as much coverage as you’re approved for now
• Layer in convertible term coverage
• Gradually convert to whole life as income allows

Once you have health changes—like Bruce’s wife, who developed a brain tumor—you may no longer qualify for more coverage. But if you already have it in place, you’re protected.

Cost vs. Value: What Wealthy People Understand

Too often we hear, “I don’t want to be worth more dead than alive,” or “That policy premium is too high.” But here’s the shift:

Broke people understand the cost of everything and the value of almost nothing.
Wealthy people understand the value of everything and the cost of almost nothing.

It’s not about the lowest premium. It’s about what you gain:

• Peace of mind
• Liquidity
• Control
• Guaranteed capital
• Legacy that multiplies

You’re not buying insurance. You’re investing in your family’s future.

Build a Life Insurance Strategy That Empowers

Let’s circle back to the original question: How much life insurance do I need?

The answer is: You’re asking the wrong question.

Start asking: What do I want this policy to do for my family? Do you want it to replace income? Preserve your estate? Launch your kids or grandkids into a stronger financial position?

When you approach life insurance from a perspective of vision, legacy, and long-term value, you stop scraping by with the bare minimum. You start building a future that is well-funded, well-protected, and empowered.

Learn More in the Podcast

If you’re ready to shift from need-based to want-based life insurance thinking—and learn how to structure your policies for legacy, peace of mind, and long-term financial control—this episode is for you.

🎧 Listen to the full episode: How Much Life Insurance Do I Need?
We break down real examples, debunk common myths, and share why Infinite Banking changes how you view death benefit forever.

And remember: It’s not “how much life insurance do I need.” It’s about what you want to make possible—for your family, for generations.

Podcast: Play in new window | Download (Duration: 34:48 — 39.8MB)

Subscribe: Apple Podcasts | Spotify | Android | Pandora | Youtube Music | RSS | More

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