Life Insurance Needs Calculator
Calculate how much coverage your family needs based on income, debts, dependents, and future expenses.
Income & Family
Debts & Assets
Recommended Coverage
$1,505,000
20.1x your annual income
Needs Breakdown
Existing Resources
Estimated Monthly Cost
20-Year Term
$17.60/mo
30-Year Term
$26.40/mo
Estimated rates for healthy non-smoker, age 35. Actual rates vary by age, health, and insurer.
Coverage Tips
- Your employer coverage may not be portable if you leave your job — consider an individual policy.
- Even two-income families should consider childcare costs if one parent dies.
- Your mortgage is your largest debt — make sure coverage lasts until it's paid off.
This calculator provides a general estimate. Consult a licensed insurance agent or financial advisor for personalized recommendations.
How to Calculate Life Insurance Needs
The right amount of life insurance isn't a random number — it's the gap between what your family would need financially if you died and what they already have. The DIME method (Debt, Income, Mortgage, Education) is the most common framework. Add up what your family needs, subtract existing resources, and the difference is your coverage target. Most people are underinsured: the average policy covers 3-5 years of income, but financial planners recommend 10-15x.
Life Insurance Coverage Guidelines
| Life Stage | Recommended Multiple | Key Considerations |
|---|---|---|
| Single, no dependents | 3-5x income | Enough to cover debts and funeral costs |
| Married, no kids | 5-10x income | Replace income, pay off mortgage |
| Young family (kids under 10) | 10-15x income | Income, mortgage, college, childcare |
| Established family (kids 10+) | 10-12x income | Income replacement, remaining college costs |
| Empty nesters | 5-8x income | Replace income through retirement, final expenses |
| Retired | 0-3x income | Final expenses, estate planning |
Term Life Insurance Cost by Age (2026)
Term life insurance is the most affordable option for most families. Rates increase significantly with age, which is why buying coverage younger locks in lower premiums.
| Age | $500K / 20-Year Term | $1M / 20-Year Term |
|---|---|---|
| 25 | $18-22/mo | $28-35/mo |
| 30 | $20-25/mo | $32-40/mo |
| 35 | $24-30/mo | $40-50/mo |
| 40 | $38-48/mo | $65-80/mo |
| 45 | $58-72/mo | $100-130/mo |
| 50 | $95-120/mo | $170-215/mo |
| 55 | $155-195/mo | $290-365/mo |
Rates shown are for healthy non-smokers. Smokers typically pay 2-3x more.
Term vs Whole Life Insurance
| Feature | Term Life | Whole Life |
|---|---|---|
| Duration | 10, 20, or 30 years | Lifetime |
| Monthly cost ($500K, age 35) | $24-30 | $350-500 |
| Cash value | No | Yes (grows slowly) |
| Best for | Income replacement, mortgage | Estate planning, permanent needs |
| Recommendation | Most families | High net worth / specific estate needs |
Frequently Asked Questions
How much life insurance do I need if I have no dependents?
Without dependents, you generally need enough to cover your debts (student loans, car loan), funeral costs ($8,000-$12,000), and any financial obligations. A policy of 3-5x your income is usually sufficient. If someone co-signed your debts, they'd inherit the payments — that alone can justify coverage.
Should I buy life insurance through my employer?
Employer-provided group life insurance (typically 1-2x salary) is a good starting point but usually not enough. The biggest drawback: it's usually not portable. If you leave your job, you lose the coverage. By then you're older and rates are higher. Best approach: take the employer benefit, but supplement with your own individual policy for the bulk of your coverage.
Does a stay-at-home parent need life insurance?
Yes. Replacing a stay-at-home parent's services — childcare, cooking, cleaning, transportation — costs $30,000-$50,000+ per year. If the stay-at-home parent dies, the working parent would need to hire that help or reduce their work hours. A policy of $250,000-$500,000 is common for stay-at-home parents.
See also: Homeowners Insurance Calculator and Budget Planner.