Life Insurance Calculator: How Much Coverage Do You Need?

Estimate how much life insurance you need: income replacement, mortgage, debts, college and final expenses, minus savings and existing cover.

Yearly income your family would need ($ per year)Use the surviving household budget after adjusting housing costs for any mortgage payoff entered below

Years of income support (years)For example until your youngest child is 22, or until your partner retires

Yearly increase in that income (inflation) (%)

Return the payout could earn (% per year)What the invested lump sum earns while it is drawn down

Mortgage balance to pay off ($)

Other debts (car, student loans, cards) ($)

Funeral and final expenses ($)

College fund to set aside (all children) ($)

Other lump sums (emergency fund, childcare) ($)

Savings and investments available ($)Money your family could use — leave out retirement accounts you want kept for retirement

Life insurance you already have ($)Include group cover through work

Estimate additional life insurance from a surviving household budget, debts and planned lump sums. The calculator values income payments starting immediately, adds one-off needs and subtracts available savings and existing cover. It is a needs scenario using your assumptions, not an insurance quote or an investment forecast.

How to use this tool

Enter annual household spending and the support period.
Set spending growth and an investment return after tax and fees.
Add mortgage payoff, other debt, final expenses, education and other lump sums.
Subtract usable savings and existing insurance, then compare the coverage gap and rounded policy size.

Formula

q = (1 + income growth) ÷ (1 + investment return)

Income need = P × (1 − q^n) ÷ (1 − q)

Additional coverage = max(0, income need + lump sums − savings − existing insurance)

P is the first annual payment and n is the number of years. Payments occur at each year’s start; when growth equals return, income need is P × n. The suggested policy size rounds additional coverage up to $50,000. Remove mortgage payments from household spending if the mortgage balance is paid off separately.

Example

For $60,000 a year for 15 years, with both growth and investment return at 3%, income need is $900,000. Add a $250,000 mortgage, $15,000 debt, $15,000 final expenses and $100,000 education fund: total needs are $1,280,000. Subtract $50,000 savings and $100,000 existing insurance to get $1,130,000 additional coverage, rounded to $1,150,000.

Frequently asked questions

Should I use salary or household spending?

Use spending the surviving household needs. Some costs end while others, such as childcare, can rise. Do not automatically use a fixed share of salary.

Are life insurance proceeds taxable?

Death proceeds are generally excluded from the beneficiary’s income. Interest and certain transfers can be taxable. The return assumption should allow for tax and fees on subsequent investments.

Does this include survivor benefits?

No. If eligible Social Security survivor payments cover part of the budget, reduce the income entered for the relevant period. A single fixed support period cannot represent every change in benefits.

Is ten times income enough?

That shortcut ignores debts, support duration and existing resources. The displayed multiple is a comparison, not a coverage recommendation.

Sources

This tool gives an estimate for general information only. It is not financial, tax, legal or medical advice — check with a qualified professional before you rely on the result.

Last updated: 2026-10-30