Life insurance calculator: how much coverage do you need? |

Life insurance coverage calculator

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Determine how much coverage you need to protect your family’s financial future.

How much life insurance do you need?

Answer three questions to see the coverage we recommend.

1) How much debt do you owe?
Include mortgages, credit cards, car loans, student loans and other debt.


2) How much do your loved ones need each month?
Start with how much you take home monthly, adding rent, food and necessities.


3) How many months will your loved ones need the income?
Indicate how long you think your loved ones need before they can sustain themselves in your absence


Your recommended coverage:


Typically you'll want to add another $15,000-$20,000 for final expenses such as medical costs and funeral expenses.

This life insurance coverage amount is just an estimate. Because everyone’s financial situation is different, you may want to increase or decrease your amount of coverage to meet your specific goals. Talk to a financial planner or adviser to learn more about how much life insurance coverage is best for your unique situation.

Other factors to consider

Generally, your life insurance policy should cover the gap between fulfilling your long-term financial obligations — including things like a mortgage, student loans, credit card debt and your family’s ongoing living expenses — less any assets you may have. Because this calculator doesn’t account for your savings, investments and other assets, you may want to subtract your assets from the recommended coverage amount to get a more accurate estimate of your life insurance needs.

Your age, health and needs at this stage of you and your family’s life should also play a role in deciding how much coverage you get. If your kids are younger, factor in the costs of college tuition should you die before they’ve completed their education. If you and your partner are nearing retirement and have children who are financially independent, your living expenses may not be as high as they once were.

You’ll also want to keep in mind any medical payments your family will be left with as a direct result of your death. Unfortunately, dying doesn’t come cheap, so you may want to add in $15,000 to $20,000 extra to cover your funeral, burial and related costs.

Other factors to consider before settling on a coverage amount include inflation and potential taxes. With the rate of inflation averaging 3% to 4% each year, the coverage you buy now won’t be worth as much in 20 or 30 years. And if you live in one of the six states that impose inheritance taxes — Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania — you’ll want to account any taxes your family could be stuck with. A tax adviser or estate planner can help you determine how much to factor in for these costs.

Typical coverage amounts

Average life insurance coverage amounts range from $50,000 for a bare-bones policy all the way up to $5 million and beyond. For the majority of policies, providers offer coverage in multiples of $50,000 up to $1 million. When you’re young and healthy, the difference between adding an extra $50,000 or $100,000 in coverage to your policy can be low.

Use our calculator to learn a recommended coverage amount, and then factor in your assets and any other expenses unique to you and your family’s circumstances. After you’ve found a number you’re comfortable with, round up to the nearest $50,000 to get a typical coverage amount.

Now that you know how much coverage you’re looking for, compare life insurance providers to find a policy that ensures your family’s taken care of — no matter what happens in the future.

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