I'm a financial adviser and there are 6 reasons I don't think $2.5 million of life insurance is too much for my family

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When I tell people I have $2.5 million in term life insurance coverage, most of them seem fairly shocked. After all, $2.5 million is a lot of money for any family to need if a parent passes away.

With that much money, my family would never have to worry about paying for living expenses or maintaining their lifestyle. But for me, that's really the whole point.

While a lot of people seem satisfied buying 10 times their income in life insurance, or even relying on their workplace coverage, I tend to believe those smaller amounts aren't nearly enough. For my family at least, there are a ton of reasons to have $2.5 million in life insurance coverage and hardly any reasons to have less than that.

Here's why I feel that way, and why you may want to reconsider how much coverage you have on yourself if you're the primary breadwinner in your home.

1. I'm a father to 4 children

The first reason I have so much life insurance is a simple one. I have four children now, and that means paying for activities for four kids, as well as healthcare, food, vacations, and everything else. It also means I have four kids to think of when it comes to college tuition, and we all know that won't be cheap.

The more kids you have, the more term life insurance you should probably consider. Remember that, once you're gone, you'll want life insurance coverage to replace your income and pay for everything you might have paid for if you were still alive. This includes the cost of raising your children to adulthood, but it should also include additional expenses you might want to cover like college tuition and even weddings.

2. Good health doesn't always last forever

Whatever your situation is now in terms of your family's health, try to remember that it can change at the drop of a hat. It's possible your spouse or one of your dependents could become gravely ill, and we all know that healthcare costs can wreck a family's budget in a hurry.

I sleep well at night knowing that, no matter what happens with my family's health, they'll have cash to pay for medical bills and living expenses if I'm gone.

3. My income is high

The main reason to buy life insurance is to replace your income if you were to pass away, and this also means you need to purchase more coverage if you earn a lot of money each year. Since I'm an entrepreneur who earns a high income each year, I want to make sure I have enough coverage that my family can keep up their lifestyle if I'm gone.

I already mentioned that common wisdom says to buy 10 times your income in coverage, but I personally don't think that's enough.

Policygenius can help compare life insurance policies to find the right coverage for you, at the right price »

4. My wife may not want to work

You may think life will go on as usual once you're gone, but that's not always the case. It's highly possible your spouse or partner will need some time off to grieve and take care of the kids if you pass away early, and it's even possible they'll never want to work again.

If you have enough life insurance coverage, your partner will be able to make whatever choice is best for your family. Without enough coverage, you take this decision off the table.

Personally, I prefer knowing for a fact that my wife would never have to work again if she didn't want to. That's the least I can do for her, especially since getting more term life insurance was so easy.

5. Term life insurance is inexpensive

Beyond being easy, though, term life insurance is cheap. If you're in great health, you can easily qualify for a 20-year term policy worth up to $2.5 million dollars for less than $250 per month. For a term policy worth up to $1 million dollars, you could even pay as little as $50 per month.

Also remember that you don't have to get rid of term life insurance you have. You can simply buy more policies to add onto the coverage you have already, and you can even "stagger" them so different levels of coverage expire at different times.

6. I would rather have 'too much' insurance than not enough

Since term life insurance coverage is inexpensive when you consider what you get in return, it seems silly and risky to purchase less than my family might need. With that in mind, I decided a long time ago I would make sure I had more than enough coverage at all times.

I know for a fact that my family would never wish they had less money to live on if I were to suddenly pass away, and I'm not going to put them in the position of wishing they had more. Since term life insurance is such a good deal, there's no reason to take that chance.

Policygenius can help compare life insurance policies to find the right coverage for you, at the right price »

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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