The honest answer isn't a magic multiple of your salary — it's a number your family can actually live on if your income disappeared tomorrow. The good news: you can calculate a solid estimate in about five minutes with grade-school math.
You've probably heard "buy 10 times your income." It's a fine starting point, but it can leave a Toronto family with an $800,000 mortgage badly under-insured — or an older couple with big savings over-paying. Let's do this properly, the way an advisor actually does it, with a formula you can follow and a real GTA example.
The rule of thumb (and why it's not enough)
"10× your annual income" is popular because it's easy. If you earn $90,000, that's $900,000 of coverage. Not a bad ballpark — but it ignores your specific mortgage, your kids' ages, and what you've already saved. Two families earning the same salary can need wildly different amounts. So use it as a sanity check, not the final answer.
The better method: add up the need, subtract what you have
Think of life insurance as the money that replaces you financially. Add up four things your family would need, then subtract what they already have:
- Debts & mortgage — so your family can stay in the home, mortgage-free.
- Income replacement — your take-home pay for the number of years your family depends on it (often until the youngest child is ~18–22).
- Children's future — post-secondary education (an RESP goal), childcare, and big milestones.
- Final expenses — a funeral in the GTA commonly runs $10,000–$15,000, plus any final taxes.
Then subtract your existing savings, investments, and any group life insurance. What's left is roughly the coverage to buy.
See it as a simple worksheet
A real-world GTA example: a young family in Mississauga
Sarah (36) and Mark (38) own a townhouse with a $650,000 mortgage and have two kids, ages 4 and 7. Sarah earns about $45,000 take-home; Mark earns similar. They have ~$120,000 in savings and TFSAs, and Mark has $75,000 of group life through work (≈ 1× salary).
Using the worksheet above, each parent needs roughly $1 million of coverage so the survivor could clear the mortgage, replace income while the kids grow up, and fund their education. Mark's group life covers less than 8% of that — nowhere near enough on its own. Their solution: two 20-year term policies of ~$1M each. Cost for a healthy couple in their late 30s? Often under $120/month combined — for a million dollars of protection each.
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Get My Free Life Quote →Why buying younger saves you thousands
Life insurance is priced on your age and health today, and that rate is locked for the life of a term policy. Waiting a few years — or until a health issue appears — can raise your premium substantially. Here's what $500,000 of 20-year term typically costs a healthy non-smoker by age in 2026:
Three things families in the GTA often get wrong
- Relying on work coverage. Group life is usually 1–2× salary and vanishes if you change jobs. Treat it as a bonus, not your plan.
- Skipping coverage on a stay-at-home parent. Replacing childcare and household work in the GTA is expensive — $250,000–$500,000 of coverage is common and wise.
- Forgetting to update it. A new baby, a bigger mortgage, or a move to a pricier home all change your number. Revisit every few years.
The bottom line
Don't guess, and don't just grab a round number. Add up your family's real need — mortgage, income replacement, education, final expenses — subtract what you already have, and cover the gap, almost always with affordable term insurance. For most GTA families with a mortgage and kids, that's somewhere between $750,000 and $1.5 million. Run your own numbers with the worksheet above, then have an advisor confirm it and shop the best rate for you.
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Get a Free Quote →Keep reading: Term vs. whole life insurance — which type should you actually buy, and what does each cost?
The worksheet, example, and premiums in this article are illustrative 2026 estimates for general guidance only — they are not a quote, a recommendation, or a guarantee. The family in this example is hypothetical. Your actual coverage need and premium depend on your specific finances, age, health, and the insurer. Cover & Protect is an Ontario-licensed independent insurance advisory practice (FSRA Licence #10112782). This article does not constitute insurance, tax, or financial advice for any specific individual; contact us for advice tailored to your situation.