How much life insurance do you actually need?

How do you work out how much life insurance you need?

The idea is pretty simple. Add up the money your family would still need if your paycheck stopped: a few years of income to live on, whatever's left on the mortgage, any other debts, the big future bills like college, and the cost of a funeral. Then take off what they'd already have — your savings and any cover you've already got. What's left is the gap a life insurance payout would fill.

You can also just take a quick guess at ten times your income, and people do. But doing the real sum gets you closer to a number that fits your own life, which is what the tool above does. You only type in figures, and nothing you enter leaves your browser.

What goes into the number

• Years of income — how long your family would lean on what you bring in. Ten years is a common place to start.
• The mortgage — so they can stay in the house without that monthly bill hanging over them.
• Other debts — car loans, credit cards, anything that wouldn't just go away.
• College — about $100,000 per kid for a state school these days, once you count room and board.
• Partner's income — if your spouse or partner earns money too, your family only needs to replace the gap between your income and theirs. This one field can cut the coverage number by half.
• The funeral and final bills — funeral plus associated costs runs $12,000–$18,000 on average in the US. We use $15,000 as a working figure.
• What we take off — your savings and any cover from work or an old policy, since that money's already there.

What drives the premium estimate

• Age — the single biggest factor. Premiums roughly double every decade. Lock in a policy young and the rate is fixed for the whole term.
• Health class — life insurers put you in a tier after underwriting: Preferred Plus (excellent health, clean family history), Preferred (very good health, minor issues), or Standard (average health, some history). The gap between Preferred Plus and Standard is typically 40–60%. Many people assume they'll qualify for Preferred Plus; in practice, Standard is more common.
• Smoker status — tobacco users pay roughly 2–3× the non-smoker rate, sometimes more at older ages. Quitting for 12 months or longer usually lets you re-qualify as a non-smoker.
• Term length — a 30-year term costs more per month than a 10-year term, but both lock in today's rate for the full period. Match the term to how long you need the cover (until the mortgage is paid, until the kids are out of college, and so on).
• Coverage amount — the premium scales roughly in proportion to the death benefit. Doubling the coverage roughly doubles the premium.

Questions people ask

Is this free?

Yes. No account, no catch, nothing to pay. It runs right here in your browser.

Do I have to give my name or email?

No. You only type in numbers, and they never leave your browser. We don't ask who you are.

How accurate is it?

It's a solid ballpark using the same sums an adviser would start with. It's not a quote or proper advice — your real number depends on your full picture.

What's that “ten times your income” thing?

A quick rule of thumb some people use. Fine for a gut check, but adding up your actual debts and goals gets you a better figure, which is what this does.

Should I get term or whole life?

This works out how much cover you need, not which kind to buy. For most people term life is the cheaper, simpler choice — but it's worth talking through with someone before you sign anything.

How much does term life insurance cost?

A non-smoker in their 30s in good health can get $500,000 of 20-year term coverage for roughly $40–$70 a month, depending on their health class and exact age — the tool above works out the specific number. Rates climb steeply with age: the same policy at 50 runs $150–$250+ a month. Smokers typically pay 2–3× the non-smoker rate. Health class matters a lot: Preferred Plus is often 40–60% cheaper than Standard for the same age and term.