How can you determine the exact amount of life insurance you need?
... a way to ensure you get sufficient coverage, without overpaying for coverage you don't need?
That's exactly what our life insurance calculator does!
While there are many uses for life insurance, use this calculator if your goal is to replace income in the event of your passing.
Quick Calculations to Determine How Much Life Insurance You Need
Here are a few guidelines, depending on your REASON for purchasing life insurance:
Why Americans Buy Life Insurance
According to LIMRA's 2017 "Facts About Life" study, the top three reasons people buy life insurance is:
- to cover burial and final expenses
- help replace lost wages/income of wage earner
- transfer wealth or leave an inheritance
The report also cited the increasing number of Americans using life insurance as a supplementary retirement income vehicle. In 2017, 52% of Americans said they would use their life insurance to supplement their retirement, compared to 38% in 2011. (More on this below...)
At Huntley Wealth, out of all the reasons to buy insurance above, the one we see most often is #1... people using life insurance to replace lost income in the event of death.
If you're trying to replace lost income due to death, this life insurance calculator will help you determine how much life insurance coverage you need, by solving for the face amount needed to replace your income.
How the Calculator Works
This is a pretty smart life insurance calculator.
Inflation & Interest
First, the calculator factors in inflation. Let’s say you determine that if you were to pass away today, your spouse would need $500,000 of life insurance coverage.
Well, here’s the problem…
Due to inflation, your spouse may need twice the amount as today if you passed 15 years from now.
Next, the calculator also factors in interest your beneficiary will earn on the death benefit proceeds. As long as we assume your spouse won’t “stick it under the mattress”, we can assume they’ll earn some interest on the money, right?
And by adding this interest to the calculation, your spouse’s money will last longer, meaning you may be able to get by with less coverage.
Life Insurance for Supplemental Retirement Income
As indicated by the aforementioned LIMRA report, you may be interested in life insurance NOT for its coverage, but to grow a cash value and future income stream.
If that’s the case, you’re less concerned about how much you need (making this calculator less important), and more concerned about the best whole life or universal life insurance policies for cash value growth and future income.
If that is your primary concern, I recommend you start your search using our term vs whole life insurance calculator.
Life Insurance for Estate Planning
Now let’s say you have a large estate, and may need life insurance to pay for estate taxes or to provide liquidity to your heirs.
In that case, our income replacement calculator won’t be of much use.
You’ll want to speak to an estate planning attorney and CPA to calculate (and possibly mitigate) your tax liability upon death.
Special Considerations
Some additional considerations when determining how much life insurance you need are:
- Time Left until Retirement – Many peoples’ biggest asset is their ability to work and earn income. Since most breadwinners purchase life insurance to replace that lost income in an unexpected death, you should consider how long you need to or plan to work. If you only plan on working another 10 years, you may not need more than 10 years of life insurance coverage, and so on.
- Spouse’s Income Potential – If your spouse does not currently work, would he or she be able to if need be? What is his/her income earning potential based on experience and education?
- Consider Your Debt – It’s common to purchase life insurance to cover a mortgage, credit debt, or business loan. Consider how long the term of payments is. If your mortgage will be paid off in 30 years, do you really need whole life coverage? Why not just 30 year term?
- Consider Your Savings & Investments – If you are actively saving money, adding to your 401K or IRA, etc., and your debts are decreasing as mentioned in #3, your need for insurance may greatly diminish in a short period of time. Please consider all of the above when determining how much life insurance you need.
Huntley Wealth Life Insurance Calculator
*Attention webmasters and website owners, if this is a helpful tool, please feel free to link to this page.
This such a great tool – awesome idea and fantastic job by creating it!
Thanks, Susan. I’m not genius on the computer, so it took quite a bit of hand holding to get this software onto my site. Quite the undertaking. Glad you find it useful. We’re excited to be able to offer it.
My name is Faisal and I am paralyzed because I can’t walk and I trust you that you help me
Hi Faisal, we have been in touch via email – but I haven’t heard from you in some time! Please let me know if you are still interested in some help!
I need a life insurance of 500,000 aprox.. I am 58 year old, non smoker and very healthy. I need to cover a mortgage and taxes.
Hi Leonardo.
Ramon Summerour will be in touch with you to help you with your insurance needs
Would like a Copley of quotes, I’ a 57 years lod, never have smoked or drank. I am on cholesterol medacation for one 15 years, 5’2, 131 lbs. Good cks. Great Cadio, checkups last ten years. Want 20 or 30 term life anywhere from $200,000. To $ 400,000., only owe about $27,000 on my home .No credit cards to pay off, just wanting good rate to leave for the best for my grandchildrn.
Hi Karol,
I have forwarded your information to Jason Dana to assist you with your insurance needs
No matter what criteria I enter it won’t generate a quote. But of course just like every other place..They will be contacting me…I don’t want contacted, I wanted a quote!!!
Sorry for your frustration. Rest assured no one will contact you. If you would like to contact us directly for a quote, please Feel free to call us at 888-603-2876
Just a question I’d like to get a $200,000 life insurance policy for my two children so that when I’m called home I can leave that for them. I am a smoker know since in lying about that. Although I’m going to hopefully be stopping soon. 26 years ago I hurt my neck which gave me some nerve damage so I retiredon ddisability. Other than that I’m healthy. I’m wanting to know an approx monthly charge an how long I must pay on it before it will pay out fully to my children. I do not want any phone calls right now I’m just thinking an making a plan at this time,Thank you kindly.
Hi Harold,
I’ve forwarded your information to Justin Nelson to help you with your insurance needs
I also filled out form for the quote in 1 min,but didn’t get any quotes only the we’ll be in touch message.
I apologize for that. Please call us at 888-603-2876 and we’ll get you a quote in just a few minutes.