Plan coverage that matches your family's real needs. Balance income replacement with debts and savings. See a clear target, then review it yearly together.
Use this tool for planning only; consider professional advice for final decisions.
Enter amounts in your chosen currency.
Sample inputs and a typical output, for illustration.
| Scenario | Key inputs | Estimated rounded coverage |
|---|---|---|
| Family with mortgage | Income 60,000 • Replace 70% • 20 years • Mortgage 120,000 • Savings 20,000 | USD 900,000 |
| Dual-income household | Income 85,000 • Replace 60% • Other income 25,000 • Debts 15,000 • Savings 50,000 | USD 650,000 |
| Shorter replacement | Income 55,000 • Replace 75% • 12 years • Mortgage 70,000 • Education 25,000 | USD 520,000 |
The calculator estimates total financial needs, subtracts available resources, then adds a contingency buffer. Income and childcare support are valued using a present value annuity approach.
If the real rate is near zero, the calculator uses A × n as a stable fallback.
Most families start with income. This calculator converts a target share of earnings into an annual need, subtracts other household income and survivor benefits, then optionally grosses up for taxes. The remaining annual amount is valued as a present value annuity over your chosen years. That reflects that a lump sum can be invested to support withdrawals over time, rather than simply multiplying income by years.
One-time obligations can be as important as income. Mortgage payoff, consumer debt, final expenses, education funding, and medical reserves are added directly to needs because they may be due quickly. An emergency fund line translates monthly expenses into a reserve measured in months, helping the household stay stable during transitions. Childcare support is treated as its own annuity stream when costs persist for several years.
Assumptions matter because money has a time value. The calculator estimates a real rate using expected return and inflation, approximating how purchasing power changes. A higher real rate lowers present value needs, while a lower or negative real rate increases them. When the real rate is near zero, the math switches to a payment-times-years fallback to avoid instability. Review assumptions conservatively for long horizons.
Insurance is designed to close a gap, not duplicate assets. Existing personal coverage and employer coverage count as resources. Liquid savings and investable balances can also offset required insurance, provided they are available to support dependents. Other assets may be included, but be cautious with illiquid property or business value that could take time to realize. Subtracting realistic resources yields a clearer target.
After needs minus resources, the tool adds a contingency buffer percentage to cover estimation error, benefit changes, and unexpected costs. Use the breakdown to test scenarios: extend replacement years, adjust childcare duration, or increase inflation to see sensitivity. Revisit inputs after major life events, such as a new mortgage, a child, a job change, or a raise. Regular updates keep the recommendation aligned with reality right now.
It is the estimated coverage gap after adding your needs, subtracting existing coverage and assets, then applying the buffer. It aims to fund income replacement, debts, and goals using your assumptions.
Use the years that reflect how long your household relies on your income. Many people pick until the youngest child is independent or until retirement savings are likely sufficient.
The tool uses a real rate derived from return and inflation. Higher real rates reduce present values, while lower real rates increase them. If assumptions feel uncertain, use conservative inputs.
They reduce the amount your family must fund from a new policy. Count only benefits and assets that would actually be available to dependents and are not earmarked for other critical purposes.
No. It is a structured estimate to help you compare scenarios and document assumptions. For complex estates, business ownership, or tax considerations, review results with a qualified advisor.
Recalculate after major changes such as marriage, a new child, a mortgage, job changes, or large income shifts. Even without changes, an annual review helps keep coverage aligned.
Tip: Update inputs after major life or income changes.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.