How Much Life Insurance Do You Really Need in Texas?

If you're like most Texans, you don’t want to leave your family guessing or struggling financially when you’re gone. Life insurance is one way to make sure they’re protected. But the big question is — how much do you actually need?

It’s not a one-size-fits-all number. What works for a single person in Houston might be completely different from what a young family in San Antonio needs. Let’s walk through what really matters when calculating your ideal coverage amount.

Start With a Simple Formula

A common starting point is this formula:

(Annual income) × (10 to 15 years) + Debts + Future expenses − Current assets

Here’s what that means in plain terms:

• Annual income: Think about how much your family would need to replace your income. Most people use 10 to 15 years’ worth as a guide.
• Debts: Include your mortgage, car loans, credit cards, or any personal loans.
• Future expenses: College tuition, childcare, final expenses (funeral costs), or medical bills.
• Assets: Subtract what you already have set aside—savings, existing life insurance, retirement accounts.

This gives you a ballpark, but it still needs to match your lifestyle and values.

Consider Your Stage of Life

The amount of coverage you need in your 20s is very different from what you’ll need in your 40s or 60s. Here’s how to think about it based on life stage:

Young and Single

You might not have dependents, but you may still want to cover student loans (if you have co-signers), final expenses, or leave a gift for a family member. $50,000 to $100,000 could be enough here.

Married, No Kids

Think about how your spouse would manage without your income. Would they need help paying the mortgage? Could they take time off work to grieve and reset? You might need anywhere from $250,000 to $500,000 depending on your lifestyle.

Married With Kids

This is where coverage matters most. You’re replacing income, paying off a home, possibly covering education, and protecting your family’s quality of life. It’s not uncommon to need $500,000 to $1 million or more. If you have multiple children or your spouse stays at home, you may want to increase that.

Older Adults

If your children are grown and your debts are paid off, you might only need a small policy to cover final expenses and leave a legacy. Many Texans choose $25,000 to $100,000 policies in this stage.

Don’t Forget the Cost of Living in Texas

Texas is known for its relatively affordable housing, but costs vary by city. A family living in Dallas, Austin, or The Woodlands may need a larger policy than someone in a rural area where mortgage payments and everyday expenses are lower.

Also, keep in mind how inflation can affect long-term goals like college savings. What feels like enough today might not stretch as far 15 years from now.

Term vs. Whole: What Are You Protecting?

If you’re looking to cover your income for a specific period—like until your kids finish school or your mortgage is paid—term life insurance usually does the job. You can get a large amount of coverage for a lower monthly cost.

If you’re thinking long-term and want to leave money behind no matter when you pass, whole life insurance might be a better fit. Some Texans use it to cover funeral costs, pass on wealth, or even build cash value over time.

Common Mistakes to Avoid

Many people in Texas either underestimate how much they need… or overpay for features they won’t use. Here are a few things to watch out for:

• Basing it only on what you can afford today: You can often layer policies or start smaller and increase later.
• Forgetting inflation: $500,000 today won’t feel like $500,000 in 20 years.
• Ignoring your spouse’s role: Even if they don’t work outside the home, their contribution is significant—childcare, home management, and more. That time costs money to replace.
• Assuming employer life insurance is enough: Most group policies cover only 1x your salary and don’t move with you when you change jobs.

A Real Texas Example

Let’s say you’re a 35-year-old father of two living in Katy, Texas. You earn $75,000 a year. Your mortgage is $280,000, you owe $20,000 in student loans, and you want to leave $100,000 per child for college.

Using the formula:

• Income replacement: $75,000 × 10 = $750,000
• Debts: $280,000 + $20,000 = $300,000
• Future expenses: $200,000 (college) + $15,000 (funeral) = $215,000
• Assets: $100,000 in savings and retirement

Total need: $750K + $300K + $215K − $100K = $1.165 million

In this case, a 20-year term policy for $1.2 million might be ideal. Depending on your health, that could cost as little as $35–$50/month.

Final Thought

If you're in Texas and wondering how much life insurance you actually need, the best starting point is getting clear on what you want to protect and why. Every number on the calculator represents real people and real futures—your kids, your spouse, your peace of mind.

Working with someone who understands the local cost of living, common family structures in Texas, and how policies actually work here can make all the difference.