Start with the missing money
The amount is not a rule of thumb or a multiple of income. It is the money other people would need if your income, unpaid work or business contribution disappeared.
List the mortgage and other debts, ongoing family income, education or caregiving commitments, final expenses and existing resources. Count only needs that would actually remain.
Different needs can end at different times
A mortgage may decline over 15 years while income support for a young child may continue for 25. One permanent amount can therefore be more expensive than a layered structure that reduces as specific needs end.
For example, a family might need $750,000 while the mortgage and family-income need overlap, then $250,000 after the mortgage is gone. The figures are illustrative; the structure is the point.
Too much and too little both have a cost
More coverage is not automatically more responsible. Premium spent on a need that was never identified may displace savings, debt repayment or other protection.
Too little coverage can leave a known family need unfunded or end before the need does. The calculation should show which need is covered, when it ends and what assumption would change the answer.
Official sources
This is general educational content, not a recommendation of a product or amount for a particular person. The answer changes with the contract, need, finances and health.