How do I know if I have enough life insurance coverage?

A common rule of thumb is to have coverage equal to 10 to 12 times your annual income, but a more precise approach is to calculate your actual financial obligations. Add up your outstanding debts like mortgage and loans, future expenses like college tuition, and the income your family would need to replace for several years. Then subtract any existing savings, investments, or current coverage you already have. Consider your specific situation: number of dependents, whether your spouse works, your age, and how long until your children are financially independent. If your family would struggle to maintain their lifestyle or pay major expenses without your income, you likely need more coverage. Reviewing your policy every few years or after major life changes is also important.