Life Insurance Calculator

The most thorough method adds up all financial obligations your family would face — income replacement, outstanding debts, final expenses, and college costs — then subtracts existing assets like savings, retirement funds, and current coverage. The gap is your recommended coverage amount. This calculator uses exactly that approach.

A common rule of thumb is to carry 7 to 10 times your pretax annual salary in life insurance coverage. However, this is only a starting point. Your actual need depends on your debts, number of dependents, existing savings, and whether a surviving spouse has their own income.

The earlier the better — premiums are significantly lower when you're young and healthy. Most financial experts recommend getting life insurance when you first take on financial obligations: getting married, buying a home, or having children. That said, it's never too late to get covered if you have dependents or debts.

Costs vary widely based on age, health, coverage amount, and policy type. A healthy 30-year-old might pay $20–$30 per month for a $500,000 20-year term policy. Whole life and permanent policies cost more but build cash value over time. Term life is generally the most affordable option for pure income-replacement coverage.

Term life insurance covers you for a specific period (e.g., 10, 20, or 30 years) and pays out only if you die during that term. It's typically more affordable. Whole life insurance covers you for life, builds cash value over time, and tends to cost significantly more. Most financial planners recommend term life for income replacement needs.

Yes — retirement savings are an existing asset that reduces how much coverage you need. If your family could access those funds after your passing, they offset some of the financial gap. However, consider whether early withdrawal penalties or taxes might reduce the usable amount before including the full balance.

Absolutely. A surviving spouse's ongoing income reduces the total amount your family would need from a life insurance payout. This calculator accounts for survivor income by factoring it into the assets side of the equation, lowering the recommended coverage amount accordingly.

You should review your coverage after any major life event — marriage, divorce, having a child, buying a home, a significant raise, or paying off major debt. As your obligations grow or shrink, your coverage needs change. A general review every 3–5 years is a good habit even without major life changes.