In my mind, these are the questions that matter:
1. If you died today, how much would your wife need to 1) bury you, 2) continue living in your current home in your current lifestyle -- your children will be upset enough; don't make them move, 3) educate the children, 4) retire comfortably. Assume she'd take off a little time from work (we've just had a death in the family, and settling an estate does require some time and effort, even if you ignore the emotional aspects), but then would continue to bring in her current salary.
2. If your spouse died today, how much would you need to accomplish these goals? Since you likely don't earn the same salary, the answer will probably be different.
When our children were younger and we had fewer assets, we carried rather large policies. We operated on the assumption that if either of us died, the other would be able to put food on the table . . . but would appreciate help with the big-ticket items like the mortgage and college. We also assumed that if one of us were to die, the other would be forced to "hire help" for chores that we were currently able to complete between the two of us. We operated on the assumption that the surviving spouse would never remarry /would never have a second income in the household. Now that our kids are teens and we have a paid-off house and college expenses in the bank, we've decreased our life insurance -- twice, in fact -- but we still have term policies.
We have insurance through my husband's work, and I can't remember what we pay for it, but it isn't significant. We're at the point we could drop it, but I don't know if we will -- his health isn't the greatest, so I might want to keep his insurance.
We do have a $5000 policy (which would cover a funeral) on each of our children through my work. It costs $1/month. It's super cheap 'cause we're so unlikely to use it.
Changing the subject slightly, don't neglect disability insurance. In terms of money only, death of a spouse /parent isn't the nightmare scenario -- that'd be awful, but most of us have some insurance money that'd arrive to help. Disability is the thing that really oughta scare us all. The worst-case situation is that one spouse is sick or injured and has high medical bills, needs medication or a stay in a rehab facility . . . but also can't work around the house. This leaves the healthy parent working AND raising the children alone AND taking care of a sick spouse. None of us could manage that well, especially if the kids were still small.