Most people guess at how much life insurance they need, and the guess usually comes in low. A typical guess protects a family for two or three years. Without anyone saying it out loud, it assumes the surviving spouse remarries or moves in with relatives.

Sizing coverage is one piece of arithmetic you can do tonight. Add up what your death would actually cost your family, then subtract what's already there. In Chapter 5 of my book, Money in Motion, I walk through it for Dave and Emily, a couple in their mid-30s with one kid, living on Dave's $7,800 a month after taxes.

Pay off the mortgage: $310,000.

Replace the income: call it $90,000 a year for the fifteen years until their kid is launched. That's about $1,350,000.

College, if that's a promise they plan to keep: $100,000.

That adds up to about $1.76 million. Now subtract what they already have: the 401(k), any coverage through work, and savings. Say that's $160,000. The realistic number is around $1.6 million.

Two reactions usually follow. The first is "that's so much more than I have." Right, and that's why you do the math instead of guessing. The second is "I can't afford that much permanent insurance." Also right, and you don't have to buy it all that way.

There are two basic kinds of life insurance. Term insurance covers you for a set window, usually 10, 20 or 30 years. If you outlive the window, the policy ends and nothing builds inside it. That's why it's cheap: somewhere around three in a hundred term policies ever pay a claim. Permanent insurance, like whole life or indexed universal life (IUL), stays in force for life and builds cash value, a pool of money that belongs to you while you're alive.

So the two work together. The full $1.6 million need gets covered the cheap way with term, and a permanent policy gets built the right way, at whatever pace your cash flow supports. How to split that is a design question, and the answer depends on your family, your budget and your goals. Anyone who answers before asking about those is selling something.

One more thing stops people more than it should: the medical exam. Some folks put the whole decision off for years, waiting to get in better shape first. Every year you wait, you're a year older, and age raises the price more reliably than a few extra pounds do. Ratings can also improve later. Quit smoking, lose the weight, or let a health scare fade a couple of years into the past, and you can ask the carrier to re-rate the policy and lower the cost.

Chapter 5 also covers the living benefit riders built into many policies today and why "buy term and invest the difference" so often falls short in real life. You can get Money in Motion in paperback, on Kindle, or as a free digital copy.

Try your own version tonight. Write down your mortgage balance, the years of income your family would need, and any promises like college, then subtract what you already have. Whatever is left is the coverage amount to measure every quote against.