Term Life Insurance Calculator: Coverage Amount and Term Length

Estimate a term life coverage amount, duration and optional policy ladder. The model combines remaining income needs with an amortizing mortgage and fixed lump sums, then subtracts existing resources. A ladder splits coverage among policies ending at different times as the modeled need falls.

How to use this tool

1. Enter age, annual household spending and support years.
2. Set the assumed payout return after tax and fees.
3. Add mortgage balance, interest and remaining years, then other lump sums and usable resources.
4. Optionally enter a quote for the suggested face amount and term.
5. Review coverage by year and the ladder amounts.

Formula

Need at year t = max(0, present value of remaining income + mortgage balance + lump sums − resources)

Income value = P × (1 − q^(N − t)) ÷ (1 − q), q = 1 ÷ (1 + return)

Term = shortest listed duration covering income and mortgage obligations

Use zero remaining income after N years. At zero return, income value is P × remaining years. Income payments start immediately; the mortgage assumes fixed-rate monthly amortization. Income, resources and lump sums remain nominal dollars, so inflation and new savings are excluded. Terms are 10, 15, 20, 25, 30, 35 or 40 years. Ladder amounts round up to $10,000; a single policy rounds to $50,000.

Example

A 35-year-old needs $50,000 yearly for 20 years, assumes 0% return, and has a $240,000 mortgage with 20 years left at 0%. Add $15,000 other needs and subtract $5,000 savings. Coverage today is $1,000,000 + $240,000 + $10,000 = $1,250,000. After ten years, $500,000 income and $120,000 mortgage remain, making $630,000. The suggested term is 20 years, ending at age 55.