We just bought more term insurance for my DH, and we have had term coverage for me since before DS1 was born. My dad is dying so I'm seeing firsthand how important it is to maintain life insurance according to your circumstances. (Fortunately, they did maintain it-- my dad's salary is 5 times or more what my mom's is, and when he's gone, the life insurance will mean she can still pay the mortgage).
Term insurance costs much, much less for the amount of coverage you get than "whole life" insurance. The idea with whole life is that you eventually get the money back out if you never use the insurance--it's like a super long term investment, a combo of insurance and investment. But you can probably find much better return on investment if you invest money somewhere else, and whole life is just too expensive for most people to get the amount of coverage they need. Term insurance works just like insurance for your house or car: if you never have a claim, you never get anything back out of it. And that's OK with me-- we're getting it in case we do need it, and I'll be happy if we never do because it means we are still alive.
We looked at 20 year and 30 year term insurance. For me (SAHM) we have $250k worth of coverage on a 20-year term, bought in my early 30s, which costs us about $20 a month. The logic behind the amount of coverage was that it's enough to let DH hire some child care/ pay off the mortgage and use that money for child care instead/ give him some breathing room while deciding what to do next.
For DH (the breadwinner), we have about $250k of coverage through his job. This is useful because it's very inexpensive-- but it will go away instantly if he ever changes jobs, so it's not enough by itself. We just got him a $500k 20 year term policy for about $50/month (so about $1 per $10k of coverage). He is in his late 30s and healthy. We based the amount on:
1. what we would want me to be able to do in the event of his death-- pay off the mortgage (we owe less than $200k) and then take the time I needed to get back to the workforce. I could stay home for a few years while the kids are still small before returning to work, and then would be able to have a job earning less than my DH does because the mortgage is paid off. What we have seen with my parents is that part of the purpose of life insurance is to make sure you don't have to rush into any actions after someone dies. It's traumatic enough to deal with death-- you want to be able to process as needed without having to get a job/different job/etc immediately if you can manage it. For us, having me at home with the kids while they are small is important, and so the life insurance would make sure we could still fulfill that goal even if something happens to DH.
2. what we would want to leave the kids if something happens to both of us. We decided that we would want enough money to send them to college, and would want to minimize the financial burden on their guardian. Our total insurance is plenty to pay off our house and all our debts and provide for our kids.
We ended up going with 20-year terms for both of us. When the 20 years is up, the kids will be in (or already out of) college, we will have our mortgage paid off or close to it, and we can adjust our insurance coverage accordingly.
I will note that $750k in coverage is more than 10 times my DH's yearly salary. And $250k for me is infinitely greater than my yearly salary of essentially $0, LOL. I don't know that calculating according to salary is as useful as calculating according to what you would want for the remaining family in the event someone dies. We feel like the price of insurance is worth it to make sure that our family wouldn't have to be torn up even more by financial upheaval.
BTW, we got DH's insurance through Farmer's and they have a provision (at no extra cost) that allows you to take some of the insurance money out before death in the event of serious/terminal illness. Again, having seen what my parents have dealt with, that seemed like a good idea to us. Even if you have good health insurance, this kind of care can get expensive.
