Life insurance calculator: How much coverage do you need?

Life insurance proceeds can support your loved ones if you pass away unexpectedly, but you need enough coverage to help your family pay for their expenses. Our free life insurance calculator can help you find out how much coverage you need.

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By

Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Edited by

Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Reviewed by

Patrick Hanzel, CFP®Patrick Hanzel, CFP®Certified Financial Planner™ & Advanced Planning ManagerPatrick Hanzel, CFP®, is a certified financial planner and advanced planning manager at Policygenius. His expertise has been featured at Lifehacker, Consumer Affairs, Authority Magazine, Thrive Global, and Fatherly.

Updated|2 min read

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How much life insurance do you need?

Date of birth

Age is one of the many factors that determines your life insurance rates.

Your total annual salary and/or earnings, before taxes.


Do you have a spouse or partner?

We can recommend a coverage amount for your partner, too.


We'll take the number and ages of your children into account when calculating your coverage.


Include all debts, such as mortgages, student loans, car loans, credit cards, etc.

Your total household liquid savings (i.e. the funds are accessible without taxes or other penalties whenever you need them).

We don’t sell your information.

Recommended coverage for you

Optimal coverage

The most comprehensive level of protection to replace your lost income.

Your term

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Your coverage

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These estimates are for educational purposes only and shouldn't take the place of professional advice. Your coverage needs may vary based on other factors not considered here. Interested in more personalized quotes? Compare for free online, or call 1-855-695-2255 to speak with one of our licensed agents.


Your term

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Your coverage

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What do your life insurance calculator results mean for you?

Our term life insurance calculator offers you an estimate of how much coverage you need, and a suggestion of how long your policy should last.

You’ll have two options to consider based on your budget and coverage needs. 

  • Optimal coverage. This option recommends a policy long enough and a coverage amount large enough to pay for your family’s main expenses as well as your present and future financial needs — whether that’s paying off a mortgage or getting your children through college.

  • Coverage on a budget. This option recommends a policy that you can comfortably pay for year after year — even if it doesn’t offer all the coverage you need. You can opt for a shorter term to lower your premium, and speak with an agent who can walk you through different options to make sure you’re getting the best coverage for your budget.

Keep in mind that this calculator will only offer you an instant estimate of how much coverage you need. If you want to know the cost of your premiums, we’ve got you covered, too. Once you know how much coverage you’ll need, click on Get my quotes to continue your life insurance shopping journey and connect with an agent, or use our life insurance cost calculator further below on this page.

At Policygenius, our experts are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.

Quotes vs. rates

Life insurance quotes are estimates of how much your life insurance premiums will cost on a monthly or annual basis. You can get quotes online, for free, with just a few pieces of information. Life insurance rates are the final cost of your premiums, which an insurance company will only provide after they evaluate your application.

How can you manually calculate how much life insurance you need?

One common rule of thumb is to multiply your annual income by 10 to 15, especially if you have dependents, to get an estimate for how much coverage you need

  • For example, if you make $100,000 per year, you likely need around $1 million in life insurance coverage. 

  • Some people choose to add an extra $100,000 per child to account for each child’s education.

  • So for instance, if you make $100,000 per year and you have two children you’re intending to put through college, you may want closer to $1.2 million in life insurance.

You can also use the DIME formula, which stands for Debts, Income, Mortgage, and Education. To calculate your life insurance needs using this method, you tally up the following:

  • Outstanding debts 

  • Your income multiplied by the number of years your family will depend on it

  • The amount left on your mortgage 

  • The cost of your children’s education

Your tally of your outstanding debts, separate from your mortgage, should include co-signed debt like car loans and student loans that your co-signer would become responsible for when you die. You can also include personal debt that might be taken out of your savings, like credit card debt.

You should also factor in income growth and the number of working years you have left. People who are early on in their career usually have to account for more years worth of coverage than people who are approaching retirement.

Learn more about how long your life insurance coverage should last

The DIME method: How to calculate how much life insurance you need

How much does the life insurance you need cost?

According to the Life Insurance Marketing and Research Association (LIMRA), over half the population thinks term life insurance is three or more times more expensive than it actually is. [1] To determine your rates, life insurance companies estimate your risk based on your personal profile, including your age, gender, health, and other lifestyle factors.

Use our cost calculator below to get an estimate of your monthly premiums.

Learn more about how much life insurance costs

7 tips for getting the best life insurance rates

  1. Get life insurance early. The cost of life insurance increases 4.5% to 9% every year you age. Buying a life insurance policy when you’re younger and at lower risk for illness can lock you into more affordable premiums for decades.

  2. Consider your health. Some insurance companies have more flexible guidelines for certain health conditions than others, so it helps to apply with an insurer that’s favorable for your personal health profile.

  3. Consider your lifestyle. Hobbies like skydiving, piloting a private plane or traveling to places considered unsafe by the state department can affect your rates because life insurance companies might see you as a higher insurance risk.

  4. Consider future expenses and life changes. Make sure that your policy covers not only any current financial obligations, but also any future expenses. If you’re planning to have a family or a mortgage, securing a policy that matches the duration of those future events can help you get coverage at a cheaper rate early on.

  5. Consider the right type of life insurance for your needs. You usually have to decide between two main types of life insurance policies: term life and whole life. The right type of policy for you will depend on your personal circumstances, unique needs, how much coverage you need, and how much you want to pay for it.

  6. Compare life insurance companies. Every factor that contributes to determining your rates is evaluated differently by every insurer. The best life insurance company for you might not be the best for somebody else. That’s why it’s helpful to compare options across multiple insurance companies.

  7. Work with an independent broker. Independent brokers like Policygenius are not affiliated with any insurer and sell policies from multiple companies. They work on your behalf, and can shop around for alternatives if your original application results in a higher premium than you were quoted. Affiliated agents, on the other hand, are hired by one or more insurers to sell their products. Your options will be limited because affiliated agents only sell policies from the insurers they work for.

Call us at 1-800-608-2192 to connect with a Policygenius agent and get started on your application, or follow the link below.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. LIMRA

    . "

    2023 Insurance Barometer Study

    ." Accessed April 03, 2024.

Author

Katherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Editor

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Patrick Hanzel, CFP®, is a certified financial planner and advanced planning manager at Policygenius. His expertise has been featured at Lifehacker, Consumer Affairs, Authority Magazine, Thrive Global, and Fatherly.

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