Is 10× your salary enough life insurance?

Where the rule works, where it fails, and what to use instead. September 2026.

What the rule says

Take your annual income, multiply by ten. Earn $100,000, buy $1,000,000 of cover. Some versions stretch to 12× or 15×, usually with a nod to younger buyers.

Its appeal is obvious: one input, one multiplication, no thinking. That's also the whole problem.

Where it fails: two identical salaries

Consider two households, both earning $120,000.

	Household A	Household B
Income	$120,000	$120,000
Situation	Renting, no children	$400k mortgage, 2 young children
Other debt	None	$60,000
10× rule says	$1.2M	$1.2M

Illustrative example.

The rule gives both the same number. But Household B has $460,000 of debt that Household A doesn't, plus two dependents who need supporting for another sixteen years or so. The same figure cannot be right for both. One of them is over-insured and paying for cover they don't need; the other is short by a few hundred thousand dollars.

Where it's roughly fine

The rule isn't nonsense. For a mid-career earner with a modest mortgage, one or two children and no unusual obligations, ten times income lands in a sensible range — because for that specific profile, income replacement genuinely is most of the answer.

The trouble is you can't tell whether you're that household without doing the calculation the rule was meant to save you from.

What the rule ignores

• Your mortgage. Usually the single largest obligation, and completely absent from the formula.
• Dependants' ages. Two-year-olds need supporting for sixteen more years. Seventeen-year-olds don't.
• A non-earning partner. Someone providing full-time childcare has real economic value — Salary.com has put the fair-market equivalent well into six figures — but contributes $0 of salary to a 10× calculation.
• What you already have. Savings, investments and an employer policy all reduce the shortfall. The rule doesn't ask.
• Other debts. Co-signed loans and balances don't vanish with the income that was servicing them.

The alternative: add up what you'd actually need

The needs-based approach in the NAIC Life Insurance Buyer's Guide — sometimes taught as the DIME method, for debt, income, mortgage and education — asks what your household would genuinely have to cover:

• Income replacement over the years your family would need it
• Mortgage, so the home isn't sold under pressure
• Family and education needs through to independence
• Other debts
• Final expenses, commonly around $25,000

Then subtract what you already have. It's five numbers instead of one, and it takes about a minute — which is roughly the amount of extra effort standing between a guess and an estimate.

One caution about round numbers

Any method — 10×, DIME, or ours — produces an estimate with a wide margin. Coverage need isn't a precise quantity; it depends on how long your family would want income replaced, what returns any lump sum earns, and how their circumstances change. Treat any single figure as the middle of a range rather than a target to hit exactly.

What matters more is the direction of the error. Around 42% of U.S. adults say they need more cover than they have (LIMRA / Life Happens, 2024), so the common mistake is under-insuring, not over-insuring.