How to use our life insurance coverage calculator
To find out how much life insurance you need, provide a few pieces of personal information, including your age and gender, along with details about your financial situation. This information will help us estimate how much coverage you should get, how long your term should be, and how much you can afford to pay.
Here’s how each piece of information plays into calculating your life insurance needs.
Date of birth
The younger you are, the lower your premiums will be. Your age will also determine how long your coverage should last.
Gender
Based on current offerings, women pay an average of 24% less for life insurance than men; women tend to live longer than men, so covering them is considered less costly by insurance companies.
Annual income
The higher your income, the more coverage you’ll need to replace it. It’s important to have coverage that’s proportional to your income, expenses, and lifestyle.
Do you have a spouse or partner?
You don’t have to be legally married; if you share finances with a partner, there’s likely a need for coverage.
Number of children under age 18
If you have children under 18, you’ll need enough coverage to support them until they’re financially independent.
Total household debt
Add up any debt such as a mortgage, credit card debt, car loans, or student loans. Account for any financial obligations your beneficiaries would need to cover in your absence.
Total household savings
Add up any checking and savings accounts between you and your spouse, if applicable. These are the liquid assets your beneficiaries can count on.
Ready to shop for life insurance?
What your life insurance calculator results mean for you
Our coverage calculator offers you an estimation of how much coverage you need — also known as the death benefit payout — a suggested term length, the duration of your policy, and an estimate of your monthly premiums. You’ll have two options to consider based on your budget and coverage needs.
The best way to choose the right policy for your needs, however, is to talk with an independent broker. 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.
Recommended coverage for you
The right policy for you will include the coverage amount, but also the term length — or how long your policy lasts.
Optimal coverage: Ideally, your policy will have enough coverage to pay for your family’s expenses for a meaningful length of time, and a term long enough to last through your final financial obligation — whether that’s paying off a mortgage or getting your children through college.
Coverage on a budget: It’s important to buy a policy you can comfortably pay for year after year. 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 policy for you.
Keep in mind you can have multiple life insurance policies at once, so if your finances change in the future and you need to supplement your existing coverage, you can always ladder policies.
How did we calculate your term (and your spouse’s)?
Your term length is calculated based on your age and the age of your children. This is designed to last until you reach retirement age or until our youngest child turns 26, whichever comes later.
How did we calculate your coverage (and your spouse’s)?
Your coverage is calculated based on your age and term length, and is a multiple of your income. If you’re 40 or younger or your coverage needs to last 30+ years, we multiply your income by 15; the older you are, the lower the multiple is.
→ Learn more about life insurance and financial planning
How much does the life insurance that you need cost?
Life insurance companies estimate risk for each individual policyholder, so the cost of your life insurance will depend on your age, gender, health, and other lifestyle factors.
Use our cost calculator below to get an estimate of your monthly premiums. You can also check our life insurance rates to learn more about premium prices and other details on the factors that impact cost.
How are life insurance premiums determined?
Premiums are what you pay the insurance company in exchange for coverage, and they are set by the insurance company after they review your application in underwriting. (The quotes you get before then are estimates.) The six main factors that determine your life insurance premiums are the type of policy (whole or term), the term length, the coverage amount, your age, your health, and any riders you add to your policy. Traditional life insurance policy premiums stay the same for the duration of the policy.
How to get the best life insurance rates
Life insurance is federally regulated, so no insurance company will be able to offer you a discount, but some insurance companies might offer you more competitive rates than others for the same coverage and term length you need based on your profile. Applying through an independent broker like Policygenius can help you compare prices across multiple insurance companies at the same time.
As you shop for life insurance, the following tips will help you find the most competitive rates.
Get life insurance early
Buying a life insurance policy when you’re younger and at lower risk for illness can lock you into more affordable premiums for decades.
The cost of life insurance increases 4.5% to 9% every year you age, so purchasing coverage as early as possible — even if you don’t have too many financial obligations yet, like children or a mortgage — is the single best way to ensure you have access to the cheapest rates.
Consider your health
In general, the healthier you are, 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.
While each insurer weighs your health profile differently, following a healthy lifestyle in general can help you get better and more affordable coverage. People who don’t smoke, follow proper medical treatment if they have a health condition, and maintain an average weight according to the Centers for Disease Control (CDC) guidelines, are more likely to lock in more affordable life insurance rates.
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.
You might not get denied coverage by practicing a risky hobby alone, but you might have to pay an extra flat fee, which would increase your premiums. Staying away from dangerous activities can help you secure affordable rates.
Consider future expenses and life changes
When shopping for life insurance, you want to make sure that your policy covers not only any current financial obligations — like a car or student loan — but also any future expenses you might have as your life situation changes.
If you’re planning to have a family or a mortgage, having a policy that matches the duration of those future financial obligations can help you get coverage at a competitive rate early on.
Consider the right type of life insurance for your needs
You usually have to decide between two main types of life insurance policies: term and permanent.
Term, the most popular type of coverage, lasts for a specific amount of time, while permanent lasts your entire life. Term policies are simple and affordable.
Permanent policies are many times more expensive than term. Permanent life insurance is best suited for high-net-worth individuals with specific estate planning or investment needs, or people with long-term financial obligations or who 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.
Considering whole life insurance?
If you’re interested in permanent life insurance, you can learn more about whole life insurance — the most common type of permanent coverage — and use our whole life insurance calculator to estimate your coverage costs.
Consider life insurance riders
Riders offer supplemental coverage to your life insurance policy and protect you from unexpected events, like a terminal illness. Some common types oflife insurance riders — like the term conversion rider, that allows you to convert a term policy into a permanent one without having to go through the application process again — are included for free, but others cost extra.
Some add-ons, however, might be worth the additional cost, depending on your needs. When you’re purchasing your life insurance policy, your agent or broker can help you determine what life insurance riders you need.
→ Learn more about how to understand your life insurance policy
Comparison shop
Age, health, hobbies and lifestyle — all of the factors that contribute to setting your life insurance rates are evaluated differently by every life insurance company. That’s why the best way to find the lowest rates is to compare across multiple insurers.
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, following your application throughout the entire underwriting process, and shopping around for alternatives if your original application results in a higher premium than you were quoted or if your application is declined.
Affiliated agents, on the other hand, are hired by one or more insurers to sell their products. Agents know their company's offerings and application processing times very well. But your options will be limited because agents only sell policies from the insurers they work for. And because their pay includes commission, agents may have a financial incentive to sell you more expensive policies or more coverage than you need.
Frequently asked questions
What is the formula for calculating life insurance?
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.
What’s a good rule of thumb for manually calculating how much life insurance I need?
One common rule of thumb is to multiply your annual income by at least 10 times (and up to 15 times) to get an estimate of how much life insurance you need. So for example, if you make $100,000 per year, you likely need around $1 million in life insurance coverage. Many choose to add an additional $100,000 per child to that estimate to account for each child’s education, too.
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?
Life insurance rates are based on your policy, age, gender, and health. Shoppers in their 30s can pay $30 per month or less for a $500,000 term policy that lasts 20 years.
How does the life insurance company I choose affect my calculated cost?
Some insurance companies might offer you more competitive 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 I find the cheapest life insurance?
The best way to find the cheapest life insurance rates for your unique needs across multiple insurance companies is to work with an independent broker. At Policygenius, our brokers are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.
