As if it isn't a complicated enough process to choose the best life insurance policy for you and your loved ones, choosing the right amount of insurance can seem pretty daunting.

But after you've sifted through definitions of term life insurance, whole life, permanent life insurance, variable life, and more, choosing the amount you need is actually going to be a lot easier than you may think.

Why? There are several ways to decide how much coverage you need, but once you know why you need your particular coverage it isn't too difficult to calculate how much will suit your needs.

First of all, always re-evaluate your life insurance coverage when life events shift on you. Have you added children to your family? Are you caring for an aging parent? Do you want to leave a trust for your grandkids? In each case you'll want to redesign your life insurance to suit these needs and provide more funds.

On the other hand, if your kids have just graduated from college and you're close to a nice retirement package, you might want to renegotiate for less life insurance.

Once you've decided on term vs permanent life insurance, ask yourself why you want the coverage. Is it to protect your family? To pay off debts? To finance your small business? There are different ways of evaluating your insurance needs based on each of these categories.

The most common reason people get life insurance is to protect their families. In this case, how long will they need your financial support? Are your kids small? Will you need to provide funds for college? How about the retirement and long term care of a spouse?

And don't forget the mortgage, car payments, and unforeseen medical bills.

If this sounds like a lot to think about, don't worry. A qualified insurance broker will be able to guide you towards the right life insurance policy, at the right amount. They have many different means of calculating how much it will take to protect your family in the event of your passing.

In most cases, you'll also be able to calculate a rough estimate yourself based on your own monthly expenses, an estimate of what types of savings you should have, and which events to prepare for in the future. By comparing those estimates with the calculations from your broker, you'll be able to select the right amount of life insurance to protect the people you love.