What's the life you've imagined for them?

Many people are surprised to learn that the policy included as part of their benefits package is only one or two times their salary. If your family plans to use the policy to replace your lost income, this may not be enough to cover their needs — especially if you’re still many years away from retirement.

It’s also important to remember that employer policies generally don’t move with you and that rates will go up as you age.

Term - This refers to the length of coverage. If something happens to you within the term (usually 10, 20 or 30 years), your beneficiaries will receive an income tax-free payout to help replace your lost income and maintain their current standard of living.

Permanent - This offers lifelong coverage and is usually more expensive. You can learn more about permanent coverage here.

With term coverage, you’re only paying for the years during which the need is greatest (for example, when your kids are younger or while you’re paying a mortgage), and it’s generally the most affordable type of life insurance.

It varies for everyone. However, a simple way to start is to add up the balance on your mortgage, your credit card debt and the amount of money you want to leave to the people you love, then subtract your savings.

You could also start by figuring out what you can afford each month to determine the amount of coverage. You can always add more later as your budget and needs change.