The amount of life insurance you need can be calculated based on the amount of debt and dependants you are leaving behind. If you have no debt and no dependents then all you need to have is enough funds available to handle your funeral.
The other extreme — if you are a young person with four children under ten, a large mortgage and a spouse who is not employed outside the home, then you need a large amount of insurance. The amount you need to cover expenses until your children are finished school would be a significant sum.
The more life insurance you need the higher the premiums are going to be and this is the issue. People who need insurance the most are often the least able to afford it and they are tempted to roll the dice.
It is sad to hear about a person who passes away leaving a number of dependents and no insurance.