Life Insurance Calculator

Besides choosing your policy type and naming your beneficiary, setting your coverage and premium amounts will be the most important decision you'll make during the life insurance buying process.


This page:

  • Shows you two ways to quickly estimate your coverage needs

  • Lists the information necessary for a detailed quote

  • Outlines how to calculate your exact coverage need

We'll also show you how to use a simple but powerful life insurance calculator to help you crunch the numbers.

Premiums can vary by as much as 50%. Visit eFinancial, where you can fill out a short form, select a plan, and receive a true personalized quote in minutes. Click here to start.

Use InsureME to compare additional term life and whole life quotes, and get expert advice from an agent in your area, who can help you design a plan that's right for you. Click here to fill out a quick form.

How much coverage will you need?

Any comprehensive life insurance website will include some kind guide for calculating a death benefit amount for your life insurance policy.

Some sites advise you to just estimate while others want you to unearth all your financial statements, bills, loans, and receipts and do some serious math.

Our position is that while it is quite important to get an accurate amount of coverage, you won't get much closer to the "right" figure by itemizing every household expense. You need to know which expenses really count and which don't. So save some time, and your sanity, by following our simple directions!

Two simple estimates

The first order of business is to get a rough estimate on your benefit need.

An easy way to calculate this is to multiply your annual salary by eight.

For a slightly more accurate estimation, multiply your salary by five and add to it your current expenses plus your expected future expenses - including things like mortgages, debts, and loans.

One important thing to remember during this process is that while you certainly don't want to be caught underinsured, financially overextending yourself can be just as harmful. Life insurance does little good if you can't afford it.

Calculating a more accurate quote

If you're serious about buying a policy in the near future, you'll want a more accurate life insurance quote. Take some time to assess the exact coverage you and your family require. Your family's long and short term financial needs should be accounted for in your calculations. These include:

  • expenses that precede your death such as medical bills

  • expenses accrued as a result of your death such as funeral costs, estate taxes and fees.

  • payments for debts in your name such as credit card debt, auto loans, college loans, and business loans

  • future costs of your family's everyday life, such as the expense of child care, education, clothing, food, transportation, and utility bills

  • remaining amount of your mortgage and other unpaid loans

Add these up - the total represents your family's needs.

But don't stop there! Now you need a figure on your available assets.

You may have other sources of income, besides your salary, that your family will still be able to rely on even after your death. These include mutual funds, stocks, bonds, and other life insurance policies.

Subtracting the needs figure from the assets figure should give you a pretty reasonable picture of the wisest death benefit for you. 

Life insurance calculators

When you're ready to start shopping policies, double-check your figures with a life insurance calculator.

Try Netquote's evaluative calculator.

It's a great tool, and you can shop policies online from one of the largest and most trusted name in online life insurance with the click of a mouse.

To access it, simply visit Netquote, and on the first page that you arrive, click on the link "coverage levels". This will pop-up a window, scroll about half way, and you'll see a link labeled "Life Insurance Needs Analyzer". Click on it, and you got your calculator.

(Yes we know, we wish they'd make it a little easier too. But whatever - it's there, and it's an excellent tool that will help you figure out in minutes what could otherwise take hours).

Start using the calculator now.



Next: How to get low cost life insurance

For more help . . .

Getting the lowest possible premium on your life insurance is almost like an art form. There are many variables to consider, and to get the right balance of term length, benefit amounts, and policy riders and illustrations, you need to take a careful step-by-step approach to the buying process.

Our free life insurance course is designed to help you do just that.

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