Life insurance needs calculator
The needs method adds up what your family would have to pay without you, then subtracts what is already there to pay it. Enter the income to replace, your debts and future costs, your savings and the cover you already have to see the gap.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the yearly income your family would need and for how many years.
- Add debts to pay off, final expenses, education costs and any other goal.
- Enter savings and investments that could be used, and life insurance you already have.
How it works
- Income part = yearly income × years.
- Total needs = income part + debts + final expenses + education + other.
- Resources = savings and investments + existing life insurance.
- Coverage needed = total needs − resources, never below zero.
Worked example
Income to replace 60,000 for 10 years = 600,000. Debts 250,000, final expenses 15,000 and education 100,000 bring needs to 965,000. Savings of 50,000 and an existing policy of 100,000 give resources of 150,000. The gap is 965,000 − 150,000 = 815,000.
Tips
- Count only savings that your family could really use, not retirement accounts with penalties or a home they live in.
- Review the figure when your income, debts or family change.
- This is a planning estimate, not financial or insurance advice.
Frequently asked questions
How does the needs method work?
Needs = yearly income × years + debts + final expenses + education + other goals. Resources = savings + existing life insurance. The coverage you still need is needs minus resources, or zero if resources are larger.
How much income should I replace?
Enter what your family would need each year, which may be less than your full salary because your own spending stops. The years usually run until the youngest child is independent or a partner retires.
Does it account for inflation or investment returns?
No. All amounts are added at face value. Inflation raises future costs, while a payout that is invested earns a return; the two partly offset each other. For a finer estimate, discount future needs with the present value calculator.
Should I count work or group life insurance?
You can add it to existing cover, but it often ends when you leave the job. Some people leave it out to be safe.
Is this a quote?
No. It is an estimate of the amount of cover, not a price. Insurers and advisers may use other methods, such as a multiple of income.