To find out the amount of life insurance you should buy to satisfy your needs depends on many different factors but the most important thing is that there is no need to decide the amount of life insurance based on emotions. It is obvious that most people would want to leave billions for their children to be sure that after they pass their way their children would not get lost in life. The more logical approach could be much simpler. Life insurance has to cover all the liabilities for example: mortgage, credit card debt, college expenses, funeral expenses etc., or some experts say you should have enough life insurance to cover 5 to 10 times your annual income. In either case underinsuring yourself just to say you have life insurance is senseless. It is easy enough to calculate all your outstanding debt and add to it last expenses. That will give your beneficiaries debt free life. To replace the income you needs to be conservative and think that the family can earn 5% on their investments per annum and leave about 20 times of their annual income in life insurance death benefits. Upon receipt of the proceeds family can invest the income tax free dollars at 5% rate of return and have the same amount of annual income as they had when the breadwinner was alive and working.