How life insurance needs evolve across your lifespan
Life insurance need peaks during the years when dependents rely on your income and you carry large debt. A 35-year-old with a $400k mortgage and three kids needs coverage to ensure the family avoids foreclosure and maintains lifestyle if you die. At 65, the house is paid off, kids are independent, and retirement savings may exceed remaining lifespan expenses, so coverage need drops or disappears.
The curve is not smooth: it rises sharply with marriage and each child, dips with mortgage payments and retirement saving, and may rise again briefly if you retire early before Social Security replaces income. A tail of low coverage may persist as 'final expense' insurance even in retirement, but the bulk of need declines as liabilities shrink and assets grow.
Matching coverage amount to lifecycle stage
Young families often undersure themselves, betting nothing will happen. A more robust approach calculates coverage as a multiple of income: 10-12x gross income at peak need (peak mortgage + dependent years), declining to 5x income by mid-career and 0-2x income in retirement.
Reassess coverage every 5 years or after major life events (marriage, child, home purchase, inheritance). Increasing coverage when you're older and unhealthier is expensive or impossible. Buying too much early and dropping coverage in later years wastes premiums, but buying too little and locking it in is worse.