Life Insurance Calculator

Estimate how much life insurance you need by adding up income replacement, debts, education and final expenses, then subtracting what you already have.

How much life insurance do you need?

Life insurance should cover what your family would lose if you were gone: your income, your debts, future costs such as education, and final expenses. Existing insurance and savings reduce what you still need. This calculator adds those parts up and shows the gap.

How the life insurance calculator works

Income replacement: annual income multiplied by the number of years your family would need it.
Debts: your mortgage balance plus other debts, so your family is not left with the payments.
Education: number of children multiplied by the cost per child.
Final expenses: funeral and related costs.
Minus what you already have: current life insurance and savings you would use.

Worked example

Income $60,000 for 10 years, mortgage $200,000, other debts $15,000, two children with $50,000 each for education, $15,000 final expenses, existing cover $100,000 and $30,000 in savings.

Income replacement: $60,000 x 10 = $600,000
Debts: $200,000 + $15,000 = $215,000
Education: 2 x $50,000 = $100,000
Final expenses: $15,000
Total need: $930,000
Minus $100,000 cover and $30,000 savings = $800,000 extra coverage, or about 13.3 times income

Rules of thumb vs this method

You will often see a quick rule such as 10 times your annual income. It is easy, but it ignores your actual debts, number of children and savings. The method above is more personal, so it is a better starting point. Treat any result as a range, not an exact figure.

Term vs whole life

Term life covers you for a fixed period, such as 20 or 30 years. It is usually the cheaper way to cover a temporary need like a mortgage or raising children.
Whole life lasts for your lifetime and builds cash value, but premiums are usually much higher for the same cover.

This calculator does not estimate premiums, because they depend on your age, health and insurer. Get quotes from licensed providers. The tool is for education only and is not financial or insurance advice. To see your full money picture, read how to create a personal financial statement.

Frequently asked questions

How much life insurance do I need?

It depends on your income, debts, dependants and savings. Add the income your family would need, debts, education and final expenses, then subtract existing cover and savings. A common rule of thumb is about 10 times annual income.

How many years of income should I replace?

Choose the period your family would need support, such as until your youngest child is independent. Ten to twenty years is common, but your situation may differ.

Should I include my mortgage?

Yes, if you want your family to be able to pay it off. The calculator adds your mortgage balance to the total need.

Does this calculator give a premium price?

No. Premiums depend on your age, health, cover amount and insurer. Ask licensed providers for quotes.

Is this financial advice?

No. It is an educational estimate. Speak to a licensed adviser before buying life insurance.

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