Life Insurance Needs Calculator

Life insurance exists to stop a death turning into a financial crisis for the people left behind. The question of how much is not about your worth as a person but about a simple sum: what income and obligations would your dependants face, and how much capital would it take to meet them without you. Answer that and the number stops being abstract. The largest piece is usually income replacement. If a household relies on your earnings, the cover should replace enough of them for long enough for the family to adapt — often ten years or more while children are dependent, less if a partner earns and the mortgage is nearly paid. Replacing seventy to a hundred per cent of income is common; replacing all of it for a very long period produces a number so large it becomes unaffordable, so the goal is a realistic bridge, not a permanent salary. On top of income come the one-off obligations. A mortgage is the biggest for most people, because losing the earner while the loan remains can force a sale. Other debts, the cost of raising and educating children, and final expenses all belong in the total, because they are real cash needs that arrive whether or not the family is prepared. Adding them to the income figure gives the full capital requirement. Then subtract what already exists. Employer cover, an existing policy, savings and investments all reduce the gap, and ignoring them leads people to buy more than they need and pay for it for years. The gap between total need and existing resources is the amount to insure, and rounding it upward to a sensible policy size keeps the cover whole rather than penny-perfect. Term life is the usual vehicle, because it is cheap for the cover it provides and pays only if death occurs during the term. The right term roughly matches the years your dependants need support, so it can shrink as the mortgage is paid and children grow up. Cheaper is not automatically better: underinsuring leaves a shortfall exactly when it matters, and the cost of adequate cover is usually modest compared with the need it meets. This calculator estimates a coverage figure from the inputs you provide. It is a planning aid, not advice, and it does not account for taxes on payouts, existing policy terms, inflation over the coverage period or the specific underwriting rules of an insurer, so confirm the figure with a qualified adviser before buying.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.