Life Insurance Needs Calculator
Calculate exactly how much life insurance you need using the income-replacement multiplier method. Factor in debts, final expenses, existing coverage, and liquid assets for an accurate number.
Life Insurance Income-Replacement Formula
The income-replacement method estimates coverage by multiplying your annual income by the years your family needs support, then adds debts and final expenses, less what you already have.
Final expenses typically include funeral costs ($8,000–$15,000) and estate settlement fees. Liquid assets include savings and investments that survivors could access immediately.
How to Use the Life Insurance Needs Calculator
Enter your annual income
Use your gross annual salary — this is what your family needs to replace.
Select years of income to replace
A common rule is 10–20 years. Choose based on the age of your youngest dependent and years until your spouse can be self-supporting.
Add outstanding debts
Include your mortgage balance, car loans, student loans, and credit card balances your family would inherit.
Enter final expenses
The average funeral in the US costs $8,000–$12,000. Add estate settlement or probate fees for a realistic estimate.
Subtract existing coverage and assets
Enter any group life insurance through work and liquid savings. This reduces the gap your policy needs to fill.
Real-World Scenario Example
"A 35-year-old earning $75,000 with a $250,000 mortgage, $25,000 savings, and $0 existing coverage."
Inputs
Result
Total coverage need: ~$1,740,000. Recommended term: 20-year policy. Coverage gap: $1,740,000.
Important Disclaimer
Coverage recommendations are estimates based on the income-replacement method. Individual needs vary based on lifestyle, debts, and dependents. Consult a licensed insurance professional for personalized advice.
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