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 responsibilities, 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 it’ll cost. 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 determine how much your policy should be worth.
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 coverage amount because you want to pay only for the coverage amount you truly need.
What do your life insurance calculator results mean for you?
Our term life insurance 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 needs — 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 life insurance 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.
So for instance, if you make $100,000 per year and you have two children you’re intending to put through college, you may want closer to $1.2 million in life insurance.
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. People who are early on in their career usually have to account for more years worth of coverage than people who are approaching retirement.
Learn more about how long your life insurance coverage should last
How much does the life insurance you need cost?
According to the Life Insurance Marketing and Research Association (LIMRA), over half the population thinks term life insurance is three or more times more expensive than it actually is. [1] 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:
The type of policy. Term life insurance will cost significantly less than permanent life insurance policies that don’t expire, like 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’re looking to supplement your retirement or estate planning needs, or if you have dependents who need lifelong care.
The term length. Longer terms cost more than shorter terms for the same amount of coverage, because you’re guaranteeing the same rate for a longer period of time.
The coverage amount. If your policy is worth a higher dollar amount, you’ll pay more in premiums.
Your age. The younger you are, the cheaper your life insurance rates will be, since you’re less likely to die while your policy is active.
Your health. Typically, the fewer health risks you have, the lower your premiums will be.
Any additional features you add to your policy. Adding more robust coverage or certain riders will increase the cost of your policy.
With traditional life insurance, premiums most often stay the same for the duration of the policy.
7 tips for getting the best life insurance rates
Frequently asked questions
How do you know how much life insurance you need?
Calculate your recurring expenses — including monthly bills, and any current or future family expenses like a mortgage or your children’s college tuition — and factor in how much of your income you’d want to replace — for example, at least five years’ worth of your salary — 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 life insurance policy should last as long as your financial responsibilities and outstanding debts. If you have children, for example, you may want to consider a 20-year term life policy at a minimum. But a 30-year term life 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 same coverage amount and term length than others, based on your overall profile, 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.
