Life Insurance Needs Calculator

Life Insurance Needs CalculatorThis calculator will walk you through a capital needs analysis to determine how much life insurance you should own. Enter your current assets, expenses, and income, and try adjusting the rate of inflation and expected investment returns to see how these variables can impact your insurance needs. For a recommendation tailored to your specific life insurance needs, please speak to a licensed Insurance advisor .

Estimate your life insurance coverage needs:
step 1Immediate Expenses After Death

Outstanding Mortgage:

(usually the biggest debt to cover is the mortgage on the family home . . . what is the amount needed to pay off the balance of your mortgage?)


Personal Loans and Other Debts:

(determine how much funds will be needed to pay off any outstanding loans, personal lines of credit, credit card balances, etc.)


Education Fund:

(estimate, the cost of your children’s future education including tuition, books, and living expenses: allow $15,000 per year / per child for each year of schooling.)


Emergency Funds:

(it’s important to have emergency funds available for the interim while adjusting to the loss . . . usually factor in 3 – 6 months’ salary)


Final Expenses:

(allow enough to cover for funeral expenses, probate fees, etc: . . . the average cost is $10,000 to $15,000, but could also be higher.)

step 2Ongoing Family Income Needs

Replacement Income:

(how much income would your family need each month if you passed away? The general rule of thumb is 60-70% of current income)


Duration of Income:

(how many years family will need to rely on this monthly insurance income? ie: until children leave home; until spouse reaches retirement; factor in 5 years minimum)


Inflation Rate:

(inflation will eat away at the purchasing power of any fixed income, . . . realistically estimate between 2% – 4% yearly cost of inflation.)


Return on Investment:

(insurance proceeds are typically paid in a lump sum which your survivors can invest to provide for their income needs)

step 3 Current Asset Value

Existing Insurance:

(what is the total value of your existing life insurance policies:include group employer and association plans, personal individual coverage, and mortgage insurance)


Available Assets:

( cash and other investments that would be available on your death, including mutual funds, RSPs, GICs, T-Bills and other investments that could be easily liquidated.)



Assets vs Liabilities: BALANCE
Total Immediate Expenses:
Total Ongoing Income Requirements:+
Total Funds Needed:
Less Current Assets and Insurance:
Estimated Life Insurance Needed:

DISCLAIMER: This is not intended to be a complete needs analysis. Please work with your financial advisor to establish a complete financial security plan. This is not intended to be a recommendation or opinion as to the amount of insurance you require, but rather a basis for discussion between yourself and your advisor. The administrator and owner of this website take no responsibility for any financial decisions made based upon the use of this calculator. Copyright© 2017