Life insurance calculator: How much coverage do you need?

Life insurance can provide a financial safety net for your loved ones in the event of your death, but you need enough coverage to help your family pay for their expenses. Our free life insurance calculator can help you find out how much coverage you need.

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By

Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Edited by

Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Reviewed by

Patrick Hanzel, CFP®Patrick Hanzel, CFP®Certified Financial Planner™ & Advanced Planning ManagerPatrick Hanzel, CFP®, is a certified financial planner and advanced planning manager at Policygenius. His expertise has been featured at Lifehacker, Consumer Affairs, Authority Magazine, Thrive Global, and Fatherly.

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How much life insurance do you need?

Date of birth

Age is one of the many factors that determines your life insurance rates.

Your total annual salary and/or earnings, before taxes.


Do you have a spouse or partner?

We can recommend a coverage amount for your partner, too.


We'll take the number and ages of your children into account when calculating your coverage.


Include all debts, such as mortgages, student loans, car loans, credit cards, etc.

Your total household liquid savings (i.e. the funds are accessible without taxes or other penalties whenever you need them).

We don’t sell your information.

Recommended coverage for you

Optimal coverage

The most comprehensive level of protection to replace your lost income.

Your term

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Your coverage

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These estimates are for educational purposes only and shouldn't take the place of professional advice. Your coverage needs may vary based on other factors not considered here. Interested in more personalized quotes? Compare for free online, or call 1-855-695-2255 to speak with one of our licensed agents.


Your term

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Your coverage

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How to use our life insurance calculator

To calculate how much life insurance you need, you’ll provide information about your current and future financial obligations, your liquid assets, and your coverage needs. All you have to do is enter these details in the calculator’s fields. 

  • Date of birth: Your age will help us assess how long your coverage should last and how much you might pay for it. In general, the younger you are, the more coverage you’ll need — but the cheaper your rates may be.

  • Annual income: Helping your loved ones replace your income after your death is one of the main reasons to get life insurance. Knowing how much you make every year can help us get a clear sense of the death benefit amount you need.

  • Spouse or partner: Our calculator can help estimate how much coverage your spouse or partner would need, too. Even if they don’t have an income, we can recommend an insurance policy that covers the cost of their contributions to the household, such as child care.

  • Number of children under age 18: Your coverage amount should take into account the cost of raising kids, if you have them or plan to in the future. You can even include an additional amount to cover your children’s college costs.

  • Total household debt: Any debts that your loved ones would be responsible for in your absence can be covered by your life insurance policy. That’s why it’s important to include them in your coverage calculations.

  • Total household savings: These are funds that your beneficiaries could have access to in your absence to cover their financial responsibilities. It’s important to take them into account when calculating your life insurance needs because you want to pay only for the coverage amount you truly need.

What do your life insurance calculator results mean for you?

Our life insurance coverage calculator offers you an estimate of how much coverage you need, and a suggestion of how long your policy should last. 

You’ll have two options to consider based on your budget and coverage needs. 

  • Optimal coverage. This option recommends a policy long enough and a coverage amount large enough to pay for your family’s main expenses as well as your present and future financial obligations — whether that’s paying off a mortgage or getting your children through college.

  • Coverage on a budget. This option recommends a policy that you can comfortably pay for year after year — even if it doesn’t offer all the coverage you need. You can opt for a shorter term to lower your premium, and speak with an agent who can walk you through different options to make sure you’re getting the best coverage for your budget.

Keep in mind that this calculator will only offer you an instant estimate of how much coverage you need. If you want to know the cost of your premiums, we’ve got you covered, too. Once you know how much coverage you’ll need, click on Get my quotes to continue your life insurance shopping journey and connect with an agent, or use our cost calculator further below on this page.

At Policygenius, our experts are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.

How can you manually calculate how much life insurance you need?

One common rule of thumb is to multiply your annual income by 10 to 15, especially if you have dependents, to get an estimate for how much coverage you need

  • For example, if you make $100,000 per year, you likely need around $1 million in life insurance coverage. 

  • Some people choose to add an extra $100,000 per child to account for each child’s education.

You can also use the DIME formula, which stands for Debts, Income, Mortgage, and Education. To calculate your life insurance needs using this method, you tally up the following:

  • Outstanding debts 

  • Your income multiplied by the number of years your family will depend on it

  • The amount left on your mortgage 

  • The cost of your children’s education

Your tally of your outstanding debts, separate from your mortgage, should include co-signed debt like car loans and student loans that your co-signer would become responsible for when you die. You can also include personal debt that might be taken out of your savings, like credit card debt.

You should also factor in income growth and the number of working years you have left.

Learn more about how long your life insurance coverage should last

How much does the life insurance you need cost?

To determine your rates, life insurance companies estimate your risk based on your personal profile, including your age, gender, health, and other lifestyle factors.

Use our cost calculator below to get an estimate of your monthly premiums.

Learn more about how much life insurance costs

Which factors affect the cost of your life insurance?

The six main factors that determine your premiums are:

  1.  The type of policy

  2. The term length

  3. The coverage amount

  4. Your age 

  5. Your health 

  6. Any riders or additional features you add to your policy 

With traditional life policies, premiums stay the same for the duration of the policy.

What is the difference between life insurance quotes & your final rates?

When it comes to cost, keep in mind that your life insurance quotes are the pricing estimates you’ll get after providing your basic information — but your final rates will be confirmed only after the insurance company reviews your application and determines how risky you are to insure.

Learn more about how life insurance underwriting works

7 tips for getting the best life insurance rates

  1. Get life insurance early. The cost of life insurance increases 4.5% to 9% every year you age. Buying a life insurance policy when you’re younger and at lower risk for illness can lock you into more affordable premiums for decades.

  2. Consider your health. In general, the fewer health conditions you have, the more affordable rates you’ll receive, because life insurance companies will consider your chances of dying while your policy is active to be lower.

  3. Consider your lifestyle. Hobbies like skydiving, piloting a private plane or traveling to places considered unsafe can affect your rates because life insurance companies might see you as a higher insurance risk.

  4. Consider future expenses and life changes. Make sure that your policy covers not only any current financial obligations, but also any future expenses. If you’re planning to have a family or a mortgage, securing a policy that matches the duration of those future events can help you get coverage at a cheaper rate early on.

  5. Consider the right type of life insurance for your needs. You usually have to decide between two main types of life insurance policies: term life and whole life. Term life insurance is a great way to help your loved ones replace your income if you die, while whole life insurance can help if you need permanent coverage, are looking to supplement your retirement or estate planning needs, or if you have dependents who need lifelong care. The right type of policy for you will depend on your personal circumstances, unique needs, how much coverage you need, and how much you want to pay for it.

  6. Compare life insurance companies. Every factor that contributes to determining your rates is evaluated differently by every insurer. The best life insurance company for you might not be the best for somebody else. That’s why it’s helpful to compare options across multiple insurance companies.

  7. Work with an independent broker. Independent brokers like Policygenius are not affiliated with any insurer and sell policies from multiple companies. They work on your behalf, and can shop around for alternatives if your original application results in a higher premium than you were quoted. Affiliated agents, on the other hand, are hired by one or more insurers to sell their products. Your options will be limited because affiliated agents only sell policies from the insurers they work for.

Frequently asked questions

How do you know how much life insurance you need?

Calculate your financial obligations — including annual income, monthly bills, and any current or future family expenses like a mortgage or your children’s college tuition — and then subtract your liquid assets, including savings and existing life insurance like employer-sponsored group policies. The result is the amount of life insurance you need.

How long should my life insurance coverage last?

Your term life insurance policy should last as long as your financial obligations and outstanding debts. If you have children, for example, you may want to consider a 20-year policy at a minimum. But a 30-year policy could be a good option for parents of young children or new homebuyers, as this is the length of a traditional mortgage.

How much does life insurance cost?

Shoppers in their 30s can often pay $30 per month or less for a $500,000 term life policy that lasts 20 years. Life insurance rates are based on your policy, age, gender, and health.

How does the life insurance company you choose affect your calculated cost?

Some insurance companies might offer you cheaper rates for the amount of coverage and term length you need than others, based on your profile and needs, so shopping around across multiple insurers is the key to finding the right policy at an affordable cost.

How do you find the cheapest life insurance?

The best way to find the cheapest life insurance rates is to work with an independent broker, who can help you compare quotes across multiple insurance companies. At Policygenius, our agents can help you compare quotes from different insurance companies and apply with the insurer that offers you the right coverage at a price that works for you.

Author

Katherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Editor

Antonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Patrick Hanzel, CFP®, is a certified financial planner and advanced planning manager at Policygenius. His expertise has been featured at Lifehacker, Consumer Affairs, Authority Magazine, Thrive Global, and Fatherly.

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