How Much Life Insurance Do I Need?

Answer a few questions to estimate the term life insurance coverage your family might need.

The values below are examples. Replace them with your own.

Your yearly income ($) Years of income to replace Debts other than a mortgage ($) Mortgage balance ($) Number of children Education cost you want to cover, per child ($) Funeral and final expenses ($) Life insurance you already have ($, including through work) Savings and investments your family could use ($)

Term length (optional)

Age of your youngest child Years left on your mortgage Years until you plan to retire

-Suggested coverage

-Total needs

-Minus what you have

-Rule of thumb: 10 to 15 times income

Need	Amount

This is a rough estimate for education, not insurance or financial advice. Your real needs depend on your family, health, taxes and other income. A licensed agent or fee-only planner can help you decide. Nothing you type is sent anywhere.

How the estimate is calculated

It uses a common method sometimes called DIME: Debt, Income, Mortgage and Education. Your family may need enough to pay off debts, to replace your income for a number of years, to pay off the mortgage, and to fund education, plus funeral costs. Then it subtracts insurance and savings you already have, and rounds the result up to a quotable amount.

The simple rule of thumb of 10 to 15 times your yearly income is shown for comparison. The two can differ a lot, which is why the detailed method is usually more useful.

What is term life insurance?

Term life insurance pays a fixed amount to your beneficiaries if you die during a set period, commonly 10, 15, 20, 25 or 30 years. It has no savings component, so it is usually much cheaper than permanent life insurance for the same coverage. If you outlive the term, the policy ends.

Choose a term that lasts until the people who depend on you no longer need your income, for example until your youngest child finishes education, and until the mortgage is paid off.

Frequently asked questions

Do I need life insurance if I have no children?

It depends. If someone else relies on your income, or would inherit your debts, such as a co-signed loan or a shared mortgage, coverage may help. If nobody depends on you financially, you may need little more than funeral costs.

Should I count insurance from work?

Yes, enter it under existing insurance. But it usually ends when you leave the job, and it is often only one or two times your salary.

Does a non-working partner need coverage?

They can. A stay-at-home parent provides childcare and household work that would cost money to replace. Enter that cost as the income to replace.

How much will it cost?

Prices depend on age, health, coverage amount, term and whether you smoke. We do not estimate premiums here. Get quotes from several insurers or an independent agent.

Related: the loan calculator and the FIRE calculator.