Life Insurance Calculator
Calculate how much life insurance you need to protect your family. This calculator considers income replacement, debts, mortgage, future expenses, and existing resources.
Income & Family
Debts & Obligations
Existing Resources
Recommended Coverage
20-year term recommended
Coverage Needs Breakdown
| Category | Amount | Description |
|---|---|---|
| Income Replacement | $750,000 | 10 years of income |
| Mortgage Payoff | $250,000 | Pay off home |
| Other Debts | $50,000 | Credit cards, loans, etc. |
| Future Expenses | $100,000 | College, weddings, etc. |
| Final Expenses | $15,000 | Funeral, medical, legal |
| Total Needs | $1,165,000 | |
| Less: Existing Coverage | -$0 | |
| Less: Liquid Assets | -$25,000 | |
| Coverage Needed | $1,140,000 |
Different Calculation Methods
| Method | Amount | Description |
|---|---|---|
| DIME Method | $1,140,000 | Debt + Income + Mortgage + Education |
| 10x Income | $750,000 | Simple rule of thumb |
| 12x Income | $900,000 | More conservative |
| Needs-Based | $845,000 | Based on actual needs |
Estimated Monthly Premiums
Estimates for healthy 35-year-old, non-smoker. Actual rates vary.
| Coverage | 10-Year Term | 20-Year Term | 30-Year Term |
|---|---|---|---|
| $250,000 | $38/mo | $45/mo | $53/mo |
| $500,000 | $75/mo | $90/mo | $105/mo |
| $750,000 | $113/mo | $135/mo | $158/mo |
| $1,000,000 | $150/mo | $180/mo | $210/mo |
| $1,500,000 | $225/mo | $270/mo | $315/mo |
| $2,000,000 | $300/mo | $360/mo | $420/mo |
Life Insurance Basics
Term vs Whole Life
Term life is affordable and covers you for a specific period (10-30 years). Whole life is permanent but costs 5-15x more. Most people only need term insurance during their working years.
When Do You Need It?
You need life insurance if others depend on your income: spouse, children, aging parents. If you're single with no dependents, you may only need enough to cover final expenses and debts.
How Much Term Length?
Choose a term that covers until your dependents are self-sufficient or you've built enough assets. Common: 20-year term if you have young children, 10-year if kids are older.
Frequently Asked Questions
How much life insurance do I need?
Common methods:
- Simple rule: 10-12x annual income
- DIME method: Debt + Income + Mortgage + Education
- Needs-based: Calculate actual family needs
This calculator uses the needs-based approach for the most accurate estimate.
What is the DIME method?
- D - Debt: All debts (credit cards, loans, etc.)
- I - Income: Years of income to replace
- M - Mortgage: Remaining mortgage balance
- E - Education: College costs for children
Term vs Whole Life Insurance
| Factor | Term Life | Whole Life |
|---|---|---|
| Cost | Low | 5-15x higher |
| Duration | 10-30 years | Lifetime |
| Cash value | No | Yes (low returns) |
| Best for | Most people | Estate planning |
Recommendation: Buy term and invest the difference.
How long of a term should I get?
- Young children (0-5): 20-30 year term
- School-age (6-12): 15-20 year term
- Teenagers (13-18): 10-15 year term
- No children: 10 year term or until mortgage paid