Life Insurance Matters — How Much Do You Need to Feel Protected & How Does this Work in Divorce?
By Denise French CDFA, ABV, CVA/MAFF, EA, CRPC.
February is often associated with love — for partners, family, and friends. But one of the most important (and often overlooked) forms of love is loving yourself enough to protect your future. That means safeguarding not only your emotional well-being, but also your financial security.
One powerful way to do that is through life insurance.
Life insurance plays a crucial role in creating peace of mind, stability, and protection for you and those who depend on you. The big question many people ask is:
How much life insurance do I actually need to feel protected?
Let’s break it down.
Why Life Insurance Is an Act of Self-Love
Life insurance isn’t just about preparing for the unexpected — it’s about taking control of your financial future today.
It can help:
• Replace lost income for your family
• Pay off debts like mortgages, credit cards, or loans
• Cover children’s education expenses
• Fund final expenses and medical bills
• Provide financial stability during difficult transitions
For many women, especially those going through or after divorce, life insurance becomes even more important. You may now be the primary (or sole) financial provider. Having proper coverage can ensure that your children and loved ones remain secure — no matter what happens. Having your ex-spouse covered while your children are still young or through college can also be critical and is something that could be considered in divorce negotiations.
The Common Rule of Thumb (and Why It’s Not Enough)
You may have heard that you need life insurance equal to 10x your annual income. While this can be a starting point, it doesn’t account for your unique situation.
Everyone’s financial life is different.
Your coverage should reflect things like:
• Your current income
• Outstanding debts
• Lifestyle needs
• Future goals (college, retirement, home ownership)
• Number of dependents
• Existing savings and investments
A one-size-fits-all approach often leaves people either underinsured or paying for more coverage than they truly need.
Key Questions to Help Determine Your Coverage
To better understand how much protection you need, ask yourself:
Children, aging parents — anyone who would struggle financially without you.
Mortgage, car loans, credit cards, student loans, medical expenses.
College tuition, childcare or living expenses.
Investments, retirement accounts, emergency funds, or other life insurance policies.
Until children are grown?
When you add these up, you get a much clearer picture of your real coverage needs.
Term vs. Permanent Life Insurance — What’s Right for You?
There are two main types of life insurance:
Term Life Insurance
• Coverage for a specific period (10, 20, 30 years)
• Generally more affordable
• Great for covering income replacement and major expenses and I love this for growing families living on a budget. It is also usually the easiest life insurance to purchase or request as an ex-spouse in divorce negotiations.
Permanent Life Insurance (Whole/Universal Life)
• Coverage for your lifetime – the policy never ends as long as payments are made as the policy mandates.
• Builds cash value over time – this is a life insurance policy and an investment.
• Higher cost but can be part of a long-term financial strategy and we usually look to this as an investment alternative once you have maximized your retirement savings, Roth IRA back door maximums and have a health brokerage account growing.
What if I am in the middle of a divorce?
Life insurance during divorce involves planning – if you want help figuring out what policies are in effect today, what should and can be kept for the future and how to protect yourself if your ex-spouse passes away and you are left to care for the children, we can help you.
These are important questions to ask and often overlooked during the divorce process. We can help you with this and the difference if an ex-spouse passes away can be life altering.