Turn key inputs into a clear coverage target. See needs, offsets, and cashflow assumptions together. Download results fast and plan the next steps calmly.
| Input | Example value | Why it matters |
|---|---|---|
| Income replacement | $60,000 at 80% for 20 years | Maintains household cashflow during transition. |
| Debts + final expenses | $147,000 total | Prevents debt payments from reducing living funds. |
| Offsets | $65,000 savings and coverage, plus benefits | Lowers the amount insurance must cover. |
This calculator estimates a coverage gap by combining your needs and subtracting offsets. It can use present value discounting to reflect inflation and investment return assumptions.
PV for a growing annual payment stream uses: PV = P × (1 − ((1+g)/(1+r))^n) ÷ (r − g), where P is first-year payment, g is inflation, r is return, and n is years.
Many households target 60% to 100% income replacement to cover core spending while adjusting to a new budget. A 15 to 25 year horizon is common when children are young or a mortgage is outstanding. In this calculator, the first-year income target equals income × replacement percent, then values can be discounted to present dollars.
Large balances create immediate pressure on monthly cashflow after a loss. Paying off a mortgage or high-rate loans can reduce required income support later. Typical one-time items include final expenses, estate settlement costs, and education goals. Enter conservative numbers and revisit annually.
When a spouse provides childcare, eldercare, or household management, the replacement cost can be significant. Use an annual estimate for paid services and the number of years you would need that help. Shorter durations often apply as children reach school age, while caregiving can extend longer.
Offsets reduce the protection amount insurance must cover. Liquid savings, existing coverage, and expected survivor benefits can meaningfully close the gap. If benefits are temporary, use the correct duration so the present value reflects the end date. Consider keeping a separate emergency reserve rather than using every asset as an offset.
Small changes in inflation or return assumptions can shift present value totals, especially for long horizons. Run scenarios with lower returns and higher inflation to stress test the plan. The suggested coverage is rounded to improve usability, but your final number should align with underwriting availability and budget. Review inputs after major life events, and at least once each year. If you disable present value, totals become simple sums. That quick view can help during early planning. For longer horizons, present value often gives a better lump-sum estimate. It reflects both inflation pressure and potential investment growth. Use conservative rates if you prefer extra margin overall.
Either can work. Use the same basis for expenses and replacement percent. Many families start with gross income, then select a lower replacement percentage to approximate after-tax spending.
Present value grows future costs by inflation and discounts them by an expected return rate. This estimates how much a lump sum today could fund future needs over time.
Tie it to major milestones: youngest child becoming independent, mortgage payoff, or a planned retirement age. Shorter horizons reduce required coverage, longer horizons increase it.
Some are conditional and may change. Use cautious inputs and verify plan rules. If benefits are uncertain, model a second scenario with smaller payments or fewer years.
Not always. Some assets may be earmarked for retirement or illiquid. Consider only the portion you would realistically use, and keep a buffer for market volatility and timing risk.
Rounding to the nearest 1,000 simplifies comparison across policy options and premium steps. You can still adjust the target up or down to match your budget and comfort level.
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.