There are a few ways to calculate how much insurance is needed to cover this shortfall which I will be discusing in detail in a future post. That said, depending on which method you use, if you make $30,000 a year you will need anywhere from $300,000 to $500,000 worth of insurance. If you make $50,000 a year then the need is anywhere from $500,000 to about $800,000 worth of insurance.
Using an online insurance quote website, I found that in Nova Scotia, for a healthy 35 year-old male, $300,000 worth of whole life insurance will cost about $185/mo. $500,000 worth of whole life insurance for the same person would cost approximately $300/mo. My experience sitting down with families has taught me that most young couples with children can't afford to spend that much money on their insurance, therefor they end up purchasing less of it and being underinsured.
If this man instead purchases an equivalent amount of good, quality term insurance he would only have to pay $33/mo to $41/mo for $300,000 worth of coverage, or $46/mo to $60/mo for $500,000 worth of coverage (depending on the length of the term). The saved money can then be used for other financial needs like saving for the children's education or investing for financial independence. This concept is called "Buy Term and Invest the Difference," and will be discussed in more detail in a future post.