Where to find your figures
Start with the income your household would need to replace each year, then list debts and one-time expenses. Count only savings earmarked for this purpose and existing benefits you expect to be available.
Life insurance U.S. insurance
Estimate the amount needed for income replacement, debt, and one-time expenses. Subtract the savings and life coverage already available to your family.
Enter figures from your policy, quote, or benefits summary.
Worked example
$65,000 per year for 15 years plus $275,000 in debt and one-time needs totals $1.25 million. Subtracting $300,000 in savings and existing coverage leaves $950,000.
Term Life Insurance Coverage Gap Calculator · lifecovergapcalc.com
This uses flat dollars without investment returns or inflation. Avoid counting the same expense in both annual income replacement and one-time needs. Check when current coverage expires or ends with employment.
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Behind the estimate
Start with the income your household would need to replace each year, then list debts and one-time expenses. Count only savings earmarked for this purpose and existing benefits you expect to be available.
Multiply annual income replacement by the number of years. Add debt and one-time expenses. Subtract earmarked savings and existing coverage, with a minimum gap of zero.
$65,000 per year for 15 years plus $275,000 in debt and one-time needs totals $1.25 million. Subtracting $300,000 in savings and existing coverage leaves $950,000.
This uses flat dollars without investment returns or inflation. Avoid counting the same expense in both annual income replacement and one-time needs. Check when current coverage expires or ends with employment.
Consumer guidance reviewed .
Estimating life insurance needs from the family's financial circumstances.
Before you decide
Think about when the household would need less income replacement, such as when dependents become financially independent. Test different horizons to see how the estimate changes.
Include the benefit you expect your family could actually receive for the scenario. Check what happens to the coverage if you leave the job and when the benefit expires.
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