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Life Insurance Calculator
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How much life insurance do you need?
To help you estimate how much life coverage may be appropriate for your needs, we have
given you two different tools to work with. The Protection Quiz is designed to give you an
estimated range of coverage amounts, while the Needs Analysis Worksheet is more detailed
and provides you with an opportunity to refine the assessment of your life insurance needs.
These worksheets are intended to be illustrative, and should not be considered financial advice.
No worksheet can predict all of your expenses or other factors (like inflation) that can alter
your needs. Your unique circumstances may indicate that more or less life insurance is needed.
For a more accurate plan, be sure to consult an investment advisor, and review your plan
periodically to ensure it is keeping pace with your needs.
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Protection Quiz
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| It's simple. It's quick. And it will give you a ballpark idea of how much coverage you may need. |
| Your Profile |
| 0 |
You probably don't need much life insurance right now. Make sure, however, that you have enough to cover funeral costs (typically $5,500) so no one in you family would have to. |
| 1-5 |
Typically, people in your situation have minimum life insurance needs between $50,000 and $200,000, depending on the size of your outstanding loans. |
| 6-10 |
You should consider, at a minimum, coverage within the $200,000 to $500,000 range. |
| 11-15 |
Because your current and planned future expenses are considerable, you probably need a minimum of $500,000 to $750,000 worth of life insurance coverage. |
| Over 15 |
Consult a financial expert to determine the best course of action. Most likely, you'll need $750,000 or more worth of coverage. |
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Needs Analysis Worksheet |
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| The worksheet will help you refine how much
life insurance you may need to help secure your family’s financial health.
To guide you, we’ve included some typical expense amounts. But real numbers from your own
personal records are best.
Before beginning, pull together the following documents: |
- Any life insurance policies you already have
- Receipts for dependent care expenses
- Your most recent income tax form
- Your credit card billing statements
- Your checkbook ledger
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YOUR COST OF LIVING
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| Note: Enter all values as whole numbers. Please do not use $, commas or decimal points. |
Day-to-day living expenses
For example, you might use 75%
of current net income. |
$ per year X
years *
= $
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Future education funding
Typically $10,000 to $20,000 annually
for a full-time student. (1) |
$ per year X
years *
= +
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Final expenses (funeral, estate administration, etc.)
The average cost of a funeral in 1997 was $5,543. (2) |
= +
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Other expenses
Anticipated major costs, such as home renovations, a new car, or weddings. |
= +
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| Your total cost of living (A) |
= $ (A)
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YOUR AVAILABLE RESOURCES
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Cash and savings accounts
(You should not include savings used for daily living expenses). |
= $ |
Retirement savings
(do not include if you wish your retirement savings to remain intact for your surviving spouse) IRA, 401(k), etc. (3) |
= + |
Stocks, bonds and mutual funds
At their current market value |
= +
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Other principal household income
(spouse or significant other) Multiply by 60%. (4) |
Annual Gross Salary
$ X .60 X
years *
= +
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Other assets
(antiques, art collections, jewelry, real estate, etc., that can be used (liquidated) to meet your survivor's needs) |
+
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| Your total available resources (B) |
= $ (B)
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YOUR ESTIMATED LIFE INSURANCE NEEDS
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| Your total cost of living |
= $ (A) |
| Minus your total available resources |
- $ (B) |
Equals your estimated life insurance need.
If your current level of life coverage differs from this number, you may want to consider adjusting your coverage |
= $
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* The number of years you expect to receive this income or incur this cost.
1 College Board data. Note that these costs may increase faster than inflation in the future.
2 National Funeral Directors Association data.
3 Note that if your spouse is not the beneficiary of your retirement plans, taxes may erode the balance of the plan available for use by your beneficiaries.
4 Estimate your spouse’s likely income as the sole provider. This should include your estimate of Social Security benefits to surviving spouse and dependents. The 60% factor above is used to account for taxation so that a net income figure can be derived. Vary this factor if you feel combined federal, state and local taxes, and FICA will be different for your situation. |
Now that you have an idea of how much life insurance you need, review your enrollment materials.
They will give you detailed information on plan benefits, costs, limitations, exclusions, and
how you can enroll for coverage. If you have any questions about this life coverage,
please call the toll-free number listed in your materials.
NOTE: Please keep this browser open to retain the data you have entered so you can refer to it while filling out your application.
Closing the browser will erase all entered data.
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