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Life Insurance Coverage Calculator

Calculate how much life insurance coverage you need to protect your family's financial future.

$20k $500k
5 years 30 years

Common recommendation: 10-15 years for families with young children

Outstanding Debts

$0 $1M
$0 $200k
$5k $50k

Average funeral cost in USA: $7,000-$12,000

$0 $300k

Average 4-year college: $100k-$150k (public), $200k-$300k (private)

$0 $300k

If your spouse earns income, we'll reduce coverage needs by 5x their annual income

How We Calculate Life Insurance Needs

Our calculator uses the income replacement method combined with the DIME formula (Debt, Income, Mortgage, Education) to provide comprehensive coverage recommendations.

What We Include

  • Income Replacement: Typically 10-15 years of your salary
  • Debt Payoff: Mortgage, car loans, credit cards, student loans
  • Final Expenses: Funeral costs and estate settlement
  • Education Funding: College costs for each dependent
  • Spouse Income Offset: Reduces needs if spouse works

Quick Rules of Thumb

10x Rule: Buy coverage equal to 10 times your annual income (minimum)
DIME Method: Debt + Income (10x) + Mortgage + Education costs
Income Replacement: 60-70% of income for 10-20 years until kids are independent
For Stay-at-Home Parents: Value of childcare, cooking, cleaning = $50k-$100k/year

Frequently Asked Questions

What's the difference between term and whole life insurance?

Term Life: Coverage for a specific period (10, 20, or 30 years). Much more affordable - typically $20-$100/month for $500k coverage for healthy 30-40 year olds. Best for most families.

Whole Life: Permanent coverage with a cash value component. 5-10x more expensive than term. Consider only after maxing out retirement accounts and if you have permanent coverage needs.

How much does life insurance cost?

Average monthly costs for $500,000 20-year term policy: Age 30 ($20-$30), Age 40 ($30-$50), Age 50 ($80-$150). Costs depend on age, health, smoking status, and coverage amount. Life insurance is cheapest when you're young and healthy.

Do I need life insurance if I'm single with no kids?

You may not need life insurance if you have no dependents and sufficient assets to cover final expenses. However, buying a small policy while young and healthy locks in low rates if your situation changes (marriage, children). Also consider if you have: aging parents who depend on you, co-signed debts, or want to leave a legacy to charity.

Should I get life insurance through my employer?

Employer life insurance (typically 1-2x salary) is a good start and usually free, but it's rarely enough. Limitations: coverage ends when you leave the job, not portable, limited coverage amounts, rates increase with age. Best strategy: Use employer coverage as a base and supplement with an individual term policy.

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