How Much Life Insurance Do You Really Need in BC?

Picture this. It's 2 a.m. and you're running numbers in your head. If something happened to you tomorrow, would your family be okay? The mortgage, the kids, the everyday bills. It's a heavy question, and most people I meet around the Vancouver area have never actually sat down and worked it out. The good news is that figuring out how much life insurance you need isn't as complicated as it feels.

Start with what you'd leave behind

Life insurance is really about replacing your financial role in your family. So the first step is listing what would still need to be paid if your income disappeared. Think about:

• Your mortgage or rent, which around Metro Vancouver is usually the biggest one
• Loans, car payments, or a line of credit balance
• Everyday living costs for your family, often for several years
• Childcare and future education, like money you'd want tucked into an RESP
• Final expenses, such as a funeral and any leftover bills

Add those up and you get a rough picture of the gap your family would face.

A simple starting point

A common rule of thumb is to aim for roughly 10 times your annual income. If you earn $80,000 a year, that points toward about $800,000 in coverage. It's a fine place to begin, but it's blunt. It doesn't know whether you've got a paid off home or three kids under 10.

A more honest approach is the DIME method. You add up:

• Debt, meaning everything except the mortgage
• Income, your yearly pay times the number of years your family would need support
• Mortgage, the full remaining balance
• Education, what you'd want set aside for your kids

Then you subtract what you already have.

Don't forget your existing safety net

Lots of people skip this part and end up overestimating. You might already have protection in place that lowers the amount you need to buy. Consider:

• Group life insurance through your employer, though it usually ends when you leave the job
• Savings in your TFSA, RRSP, or other investments. The TFSA limit sits at $7,000 for 2026, so those balances add up over time
• CPP survivor benefits, which help but rarely cover much on their own

That workplace policy is a nice bonus, but leaning on it alone is risky. It's often only one or two times your salary, and it isn't yours to keep if you change employers.

Where you live changes the math

A family in Burnaby or Coquitlam carrying a big mortgage has a very different need than someone renting with no kids. Housing costs here are still high heading into 2026, so the mortgage line of your calculation is often the single biggest driver. And with a lot of families renewing mortgages at higher rates than they first signed for, the monthly cost your income has to cover has quietly grown. That's not a reason to panic. It just means the generic online calculators can undershoot for a lot of local families.

Term or permanent?

The amount is one question. The type is another. Term insurance covers you for a set period, like 20 years, and tends to fit growing families who want the most protection while the kids are young and the mortgage is big. Permanent insurance lasts your whole life and can build value over time, which suits different goals. Neither one is automatically right for everyone. It comes down to your budget, your timeline, and what you're trying to protect.

Revisit it every few years

Your number isn't fixed. A new baby, a bigger home, a raise, or paying off a chunk of debt all shift it. A mortgage renewal is another natural moment to check, since your balance and payment have both moved. A quick review every three to five years, or after any big life change, keeps your coverage matched to your real life instead of the one you had when you first signed up.

Still not sure what your number should be?

That's completely normal, and it's exactly the kind of thing worth talking through with someone. Book a free, no pressure call with me, Milo. We'll look at your situation together, compare options from Canada's top insurers, and land on a plan that actually fits your family. No jargon, no hard sell, just a clear answer.