Life Insurance Coverage Needs Calculator
Estimate how much life insurance coverage you need using the income-replacement method.
Assumptions used in this calculation
- Income-replacement method: One common, simplified approach among several life insurance needs-analysis methods, a financial advisor can tailor this further to your specific situation, dependents, and goals.
About this calculator
Figuring out how much life insurance to buy is a question people often answer with a rough guess or a salesperson's rule of thumb, when it's actually a straightforward calculation once you know the right inputs: how many years of income your family would need replaced, what debts would need clearing, and what savings or existing coverage would offset the total. This calculator uses the income-replacement method, multiplying your annual income by the number of years you want replaced, adding outstanding debts like a mortgage or loans, then subtracting existing savings and coverage, to arrive at a suggested total coverage amount. It's meant for anyone shopping for a term life policy who wants a defensible starting number before talking to an agent or advisor, rather than picking a round number out of thin air. Because life insurance needs vary by family situation, dependents, and goals, this is a widely used simplified method, not the only valid approach, and a licensed advisor can refine it further.
Worked example
$70k income, 10 years, $200k debt, $50k savings
Result: $850,000.00
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