Coverage breakdown chart
Example view using default inputs.
🧮Formula used
This estimator uses a needs-based approach: it totals the present value of future spending goals, adds immediate obligations, then subtracts resources already available.
🧭How to use this calculator
- Enter income, expenses, and the years you want to replace income.
- Add immediate obligations like debts and final expenses.
- Add future goals, such as education or a spouse/partner goal.
- List savings, current cover, and other liquid resources.
- Click Calculate to see the coverage gap and downloads.
Tip: Use Advanced assumptions to stress-test inflation and discount rates, then compare the range shown in the results.
📊Example data table
Example scenarios below are illustrative and not financial advice.
| Profile | Income | Debts | Resources | Estimated need |
|---|---|---|---|---|
| Single, no children | PKR 1,200,000 | PKR 800,000 | PKR 600,000 | PKR 6,200,000 |
| Couple, 2 children | PKR 1,800,000 | PKR 4,850,000 | PKR 2,600,000 | PKR 15,900,000 |
| Couple, 3 children | PKR 2,400,000 | PKR 6,200,000 | PKR 3,500,000 | PKR 23,800,000 |
Income replacement usually dominates the estimate
Replacing 60–80% of income for 15–25 years often represents 50–75% of total present value needs in middle‑income households. The calculator converts nominal rates into real rates, so income growth and inflation are separated from investment return. If real discount is low, the income present value rises quickly.
Immediate obligations create the minimum coverage floor
Debt payoff, final expenses, and an emergency fund set the “must pay” amount on day one. A common planning range is 3–9 months of essential expenses, plus one‑time costs such as burial, medical end costs, and estate administration. Paying off a PKR 4.5 million mortgage can reduce monthly cash pressure more than replacing a small extra percentage of income.
Future goals should be time-adjusted, not guessed
Education and family goals are modeled as inflated future amounts discounted back to today. For example, a PKR 800,000 education goal due in 8 years at 8% inflation becomes about PKR 1.48 million in future terms, then is discounted using the selected discount rate. Longer timelines increase sensitivity: at 15 years, the same inflation rate roughly triples a goal, which can surprise planners.
Existing resources reduce required cover, not the goal list
Savings, investments, and current life cover are deducted after needs are totaled. This keeps planning consistent: goals stay constant, but available liquidity changes the gap. If assets are illiquid, volatile, or earmarked for retirement, consider crediting only a conservative portion. Adding expected support as a present value amount helps avoid double counting pensions or employer benefits.
Assumptions matter, so review the sensitivity range
Small changes in inflation and discount rates can move the recommended benefit by meaningful amounts. The range shown shifts the replacement percentage by ±10 points and moves inflation and discount by ±1 point to illustrate uncertainty. Use this to set a practical coverage band, then compare it with policy options, premiums, and underwriting limits. Document assumptions yearly, especially after salary changes, loans, births, or major relocations.
FAQs
What does the estimator calculate?
It estimates the death benefit gap by adding immediate obligations, present value of income replacement, and time‑adjusted goals, then subtracting savings, existing cover, and other credited resources.
Why does the calculator use present value?
Present value compares future cash needs in today’s money. Discounting reflects expected investment returns, while inflation reflects rising costs. Using both avoids overstating or understating long‑term obligations.
Which replacement percentage should I choose?
Many families start between 60% and 80% of income, then adjust for working spouse income, childcare costs, and debt payoff. Use the sensitivity range to see how a ±10 point change affects coverage.
How should I set inflation and discount rates?
Use a long‑term, realistic inflation assumption and a discount rate aligned with your expected portfolio return after fees. If unsure, test multiple scenarios; higher inflation and lower discount rates generally increase the needed benefit.
Should I include home equity or retirement accounts as resources?
Only include assets your family could access without hardship. Home equity may be slow to liquidate, and retirement accounts can have penalties or be earmarked. Consider crediting a conservative portion rather than the full balance.
Is the PDF report official financial advice?
No. The report is an educational summary of your inputs and calculated estimates. Policy terms, taxes, and local rules can change outcomes. Use it to guide discussions with licensed advisers and insurers.