Life Insurance Needs Calculator — embeddable calculator

Life insurance needs estimate

Three methods from one set of figures. Nothing here is a recommendation, a quote or an underwriting outcome.

Income to replace

Annual income or economic contribution

Share of it to replace

Household spending usually falls when one member is no longer being supported, so replacing 100% is rarely the right assumption.

Years to replace it for

Often the years until the youngest child finishes education, or until a surviving partner reaches retirement.

Annual growth in the amount needed

Costs rise while the money is being drawn on. This is the rate the replacement amount grows at each year.

Return assumed on the payout

What the unspent balance is assumed to earn. A conservative figure is appropriate — the money is a reserve, not a portfolio.

Unpaid household work

Annual cost of replacing it

Child care, transport, cooking, cleaning, care for a relative — work currently done unpaid that would have to be bought in. It counts whether or not the person earns a salary.

Years it would be needed for

Debts and one-off costs

Mortgage balance

Other debt

Final expenses

Funeral costs, estate settlement and any unreimbursed medical bills.

Education funding

Other financial obligations

Resources already in place

Individual life insurance

Employer or group life insurance

Usually ends when the job does, and often cannot be taken with you. Worth weighing before relying on it.

Liquid savings

Taxable investments

Dedicated education funds

Other assets earmarked for survivors

Only assets your household would actually spend. Retirement accounts a survivor intends to keep for their own retirement do not belong here.

Sensitivity band

Years either side of your horizon

How far the range table stretches the replacement horizon in each direction.

Estimated coverage gap

$854,040

$1,274,040 of obligations, less $420,000 of resources already in place. A planning estimate, not the amount of a policy.

Total obligations$1,274,040Present value of the streams, plus the lump sums

Resources available$420,000$320,000 insurance, $100,000 other assets

Coverage gap$854,04033.0% of obligations already funded

Annual amount replaced$59,50070% of income, for 15 years

Income replacement, present value$781,814$1,028,958 undiscounted, at 4.0%

Household work, present value$112,226$15,000 a year for 8 years

This is a planning estimate and a coverage gap, not a recommended policy. It prices the obligations you listed against the resources you listed; it says nothing about your health, eligibility, the right policy type, or what cover would cost.

What the obligations are made of

Income replacement: $781,814 (61.4%)
Household work: $112,226 (8.8%)
Mortgage and debt: $265,000 (20.8%)
Education: $100,000 (7.8%)
Final and other expenses: $15,000 (1.2%)

The same household under three methods
Method	Estimate	Counts	Leaves out
Income multiple (10×)	$850,000	Annual income only	Debts, mortgage, education, savings, existing cover, unpaid work
DIME (gross)	$1,640,000	Debt, undiscounted income replacement, mortgage, education	Savings and existing cover, final expenses, unpaid work, discounting
DIME less resources	$1,220,000	DIME, less existing cover and liquid assets	Final expenses, unpaid work, discounting
Detailed needs analysis	$854,040	Discounted income and services, all obligations, all stated resources	Aid, benefits and taxes; underwriting and premiums

The four figures are not competing answers to one question — they answer different questions. The needs analysis lands $4,040 above the income multiple and $365,960 below DIME after resources.

Scroll the table sideways on a narrow screen to see every column.

How far the estimate moves on the two assumptions that matter most
Assumption	Lever	Income replacement PV	Total obligations	Coverage gap
10 years of income replacement	Replacement horizon	$546,063	$1,038,290	$618,290
20 years of income replacement	Replacement horizon	$995,751	$1,487,978	$1,067,978
15 years at 4%	Your assumptions	$781,814	$1,274,040	$854,040
3% instead of 4%	Assumed return on the payout	$834,324	$1,330,324	$910,324
5% instead of 4%	Assumed return on the payout	$734,319	$1,222,981	$802,981

Across this range the gap runs from $618,290 to $1,067,978 — a spread of $449,688. The high figure is not a target and the low one is not a floor.

Scroll the table sideways on a narrow screen to see every column.

Obligations and resources, line by line
Item	Side	Amount
Income replacement (present value, 15 years)	Obligation	$781,814
Replacement of unpaid household work (present value, 8 years)	Obligation	$112,226
Mortgage payoff	Obligation	$240,000
Other debt	Obligation	$25,000
Final expenses	Obligation	$15,000
Education funding	Obligation	$100,000
Other financial obligations	Obligation	$0
Individual life insurance	Resource	$150,000
Employer or group life insurance	Resource	$170,000
Liquid savings	Resource	$40,000
Taxable investments	Resource	$60,000
Dedicated education funds	Resource	$0
Other assets earmarked for survivors	Resource	$0
Total obligations		$1,274,040
Less resources		−$420,000
Coverage gap		$854,040

Scroll the table sideways on a narrow screen to see every column.

Survivor income, year by year
Year	Amount needed	Discount factor	Present value	Cumulative PV
1	$59,500	1.0000	$59,500	$59,500
2	$60,690	0.9615	$58,356	$117,856
3	$61,904	0.9246	$57,234	$175,089
4	$63,142	0.8890	$56,133	$231,222
5	$64,405	0.8548	$55,053	$286,276
6	$65,693	0.8219	$53,995	$340,270
7	$67,007	0.7903	$52,956	$393,227
8	$68,347	0.7599	$51,938	$445,165
9	$69,714	0.7307	$50,939	$496,104
10	$71,108	0.7026	$49,960	$546,063
11	$72,530	0.6756	$48,999	$595,062
12	$73,981	0.6496	$48,057	$643,119
13	$75,460	0.6246	$47,132	$690,251
14	$76,970	0.6006	$46,226	$736,477
15	$78,509	0.5775	$45,337	$781,814

Each year is drawn at the start of the year, so year 1 is undiscounted. The final cumulative figure is the income replacement present value in the summary above.

Scroll the table sideways on a narrow screen to see every column.