Start with what staying would cost
Would you want insurance to clear the mortgage, reduce the balance, or help the household make payments for a period? Each approach produces a different coverage need.
Add the expenses that would continue: property taxes, utilities, insurance, maintenance, and everyday living costs. If the plan pays off the mortgage, leave those mortgage payments out of the ongoing support calculation.
Know which insurance you have
Mortgage default insurance protects the lender if a borrower defaults. It is different from optional mortgage life insurance.
Mortgage life insurance generally pays the lender toward an outstanding mortgage after an insured death. An individual life insurance policy generally pays the named beneficiary, who can decide how to use the money. Compare the amount, eligibility, exclusions, and how the coverage changes over time.
Account for existing protection
Read the mortgage insurance certificate and any personal or workplace policies. If a benefit would pay down the mortgage, use that benefit against the mortgage need. Avoid also counting it as money available for groceries and childcare.
Think beyond the current mortgage term
Your mortgage may renew several times before it is paid off. Consider the period your household needs protection when comparing life insurance options.
If you move, refinance, or change lenders, check what happens to any mortgage-linked coverage. Ask the provider before assuming it continues on the same terms.
A useful question to ask
If one of us died, could the other keep the home while also paying the rest of the bills?
That answer will tell you more than the purchase price alone.