Life Insurance Calculator
Estimate how much life insurance your family would need with a needs-based method
What Your Family Would Need
Often until children are grown
Car, student and card balances
Future college costs for your children
Funeral and end-of-life costs
What You Already Have
Including group cover through work
Money your family could use
Suggested coverage
$1,035,000
About 12.9 times your yearly income
Total needs
$1,185,000
Resources you have
$150,000
existing cover + savings
Coverage gap
$1,035,000
Rule of thumb
$800,000
10× income; 12× is $960,000
Needs Breakdown
| Item | Amount | Share of Needs |
|---|---|---|
| Income replacement | $800,000 | 68% |
| Mortgage payoff | $250,000 | 21% |
| Other debts | $20,000 | 2% |
| Education costs | $100,000 | 8% |
| Final expenses | $15,000 | 1% |
| Less: existing cover and savings | −$150,000 | — |
| Suggested coverage | $1,035,000 | — |
How This Estimate Works
Life insurance replaces what your family would lose: your income for a number of years, plus money to clear the mortgage and other debts, pay for education and cover final expenses. Savings and any existing policies reduce what you need to buy. This follows the widely used DIME approach: debt, income, mortgage and education.
The Formulas
Needs = income × years + mortgage + debts + education + final
Coverage = needs − existing cover − savings
Rule of thumb = 10 to 12 × income
Amounts are in today's dollars and don't account for investment returns or inflation.
Choosing a Policy
- •Term life is usually the most affordable way to cover these needs
- •Match the term length to your longest need, such as the mortgage
- •Group cover from work often ends if you leave the job
- •Stay-at-home parents need cover too, to pay for childcare and household help
- •Review your cover after marriage, a birth or a new home