Experts say you need to buy enough life insurance to pay off your debt and mortgage and replace your income with a little padding built in for inflation.

Since people make varying amounts in income and carry varying amounts of debt, the minimum and maximum amount life insurance companies allow make for an interesting topic.

But before we discuss what the companies will or won’t allow, let’s look at how life insurance companies measure policies in terms of CPU, or Cost Per Unit.

One unit of coverage is $1,000. So a policy worth $1 million breaks down to $0.37 per unit. A policy on the lower end, like $100,000 breaks down to $.49. The more you buy, the less it costs per unit, and vice versa. As anyone in business knows, this makes bottom-line sense.

Before we get into the minimum and maximum, let’s state the average amount life insurance companies pay out. It hovers around $600,000 ($0.45 CPU).

Minimum Life Insurance Coverage

Term life insurance policies offer lower coverage amounts than premium ones like whole insurance. Although most life insurance companies’ lowest offer is $25,000, some do go as low as $10,000. These minimum-coverage policies don’t require any medical exam and pay out almost instantly.

Obviously, most families can’t sustain the cost of living on $10,000 or even $25,000, for very long. But minimum coverage policies do make sense for single people with no dependents, mortgage or debts.

Many singles have few obligations, so a $10,000 payout on a term-level insurance policy will cover the average cost of a funeral and spare a family from carrying that burden in addition to their grief over someone gone too soon.

Now, you can also buy a dividend-producing whole life insurance policy with lifetime coverage for as little as $10,000 as well. But you’ll be paying a lot more for a lot less in return.

Maximum Life Insurance Coverage

If you’re wondering if infinite life insurance coverage is possible, the answer is yes. But before you start shopping for online life insurance deals with those kinds of payouts, you need to know that most life insurance companies allow a maximum of 25 times your income. So you need a high-income stream and a lot of assets to afford that kind of expected payout. And you’ll have to back up your financial status with additional paperwork such as pay stubs and tax returns.

These higher coverage amounts come with permanent policies because they offer more fiduciary benefits to both you and your insurance company for a longer amount of time. Term life insurance policies have an expiration date of 30 years.

If after reading this you want to see where you fall on the maximum/minimum measurement scale, have a look at your income, standard of living debt, and current income. Then get on the computer to get an online insurance quote armed with the information you need to get the best life insurance for you and your family.