How much life insurance does a business owner need?
Add up separate needs, because each protects different people: personal coverage for your family, key person coverage for the business, and buy-sell coverage so your partners can buy your share. For the personal part, add your debts, your mortgage, your income for the years your family would need it and your children’s education, then subtract the coverage you already own; that is the DIME method, and our Plan Check shows the arithmetic with your numbers.
Decide where your business goes.
- Will packageA last will and testament, prepared online from your answers.from $695
- Trust packageA revocable living trust with a certification of trust and a pour-over will, prepared online from your answers.from $1,495
Starting prices, per person. Couples can set up a joint trust for both of you, or two plans with $100 off the second.
- Free health care directive: Says who decides about your medical care if you cannot, and what you want.
- Free financial power of attorney: Names who can handle your money matters if you are alive but unable to act for yourself.
Boring Insurance Agency is a licensed insurance agency, not a law firm, and does not provide legal advice. No attorney-client relationship is created by using this service. These documents are self-help forms prepared from the information you provide. Laws vary by state, and your circumstances may require changes these forms do not make. We recommend you have an attorney licensed in your state review your documents before you sign them.
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Kevin Kelsey
Founder | Principal Agent
Founder and principal agent of Boring Insurance, CA License #6011822. He put off his own estate plan because he did not want to take the time to find a lawyer, then built the offer so owners can set up a will or living trust online and fund it with life insurance. He is a licensed agent, not an attorney, and these pages are not legal advice.
A worked example
An owner earning $150,000, with a $400,000 mortgage, $50,000 of other debt, two children under 18 and a $500,000 policy already in force.
Debts
- Amount
- $50,000
Income, 10 years
- Amount
- $1,500,000
Mortgage
- Amount
- $400,000
Education, 2 children at $100,000
- Amount
- $200,000
Final expenses
- Amount
- $20,000
Minus coverage already owned
- Amount
- −$500,000
Personal coverage to consider
- Amount
- About $1,670,000
An illustration of the method, not a recommendation. Your own numbers, health and age decide the real amount and price.
The detail
Life insurance death benefits are generally not included in the beneficiary’s gross income, though interest paid on the proceeds is taxable.
A business-owned policy on an employee keeps its tax-free death benefit only if the employee was notified in writing and consented in writing before it was issued.
26 U.S. Code section 101 (Cornell Legal Information Institute)
The federal basic exclusion amount is $15,000,000 per person for deaths in 2026, which is the threshold where estate tax planning with life insurance becomes attorney work.
What this means for you
- Count only coverage that will still be there. Group life through an employer ends when the job does, and a policy the business owns pays the business. Neither reliably pays your family.
- Pay it to your trust. A death benefit paid to your living trust follows your plan, which matters most with young children or a business to keep running.
- Term covers most personal needs. Term life is usually the cheapest way to cover a mortgage and the years your children are at home. Permanent coverage earns its place for needs that never expire.
- Price is underwriting, not a calculator. Age, health and the amount decide the premium. A range starts the conversation; a quote finishes it.
Go deeper on any of these
Related questions
- Is ten times income enough?
It is a common starting point, not an answer. An owner with a paid-off house and grown children may need far less, and one with young children, a large mortgage and guaranteed business loans may need more.
- Should the business pay for my life insurance?
For key person and entity-purchase buy-sell coverage, the business usually owns and pays. For coverage meant for your family, owning it personally or through your trust keeps it out of the business’s hands. Ask your CPA how premiums are treated.
- Can I get quotes from you?
Yes. We are a licensed agency and shop life insurance across carriers. Price and approval depend on underwriting.
- Life insurance quotes
- How do I know whether I need a will, a trust or an attorney?
Take the Business Owner Plan Check. It asks about ten short questions about the business, your household and what you already have, then says whether most owners in your position set up a will or a living trust, or should see an attorney first, and estimates the life insurance in ranges with the arithmetic shown.
- Take the Plan Check
Set it up, then fund it
We set up wills and revocable living trusts through our online document platform, from $695 for a will and $1,495 for a trust, and we place the life insurance that pays into them. We do not draft operating, partnership or buy-sell agreements, and we do not give legal advice; when your situation needs an attorney, the Plan Check says so.
Boring Insurance Agency is a licensed insurance agency, not a law firm, and does not provide legal advice. No attorney-client relationship is created by using this service. These documents are self-help forms prepared from the information you provide. Laws vary by state, and your circumstances may require changes these forms do not make. We recommend you have an attorney licensed in your state review your documents before you sign them.
Written by Kevin Kelsey, founder and principal agent, CA License #6011822. Last updated 2026-10-05. See all guides.