Life Insurance Calculator
Most tools give you a multiple of your income. That is a shortcut that ignores your mortgage, your children and what you already have. This adds up what the money must actually do, takes off your existing cover, and shows both answers so you can see how far apart they are.
Cover you still need
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- Total the money must do
- $0
- Replacing your income
- $0
- Debts and final costs
- $0
- Education
- $0
- Already covered
- $0
- The quick rule of thumb says
- $0
Where the money goes
Each block is sized by its share, so you can see whether total the money must do or replacing your income is the bigger part without reading a single number.
Move it and watch
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at {v} for your income a year
And what you can change
Why your own figure may differ
What each length of cover costs
Replacing income for longer needs a bigger payout. This shows the trade, so you can pick a number rather than guess at one.
| Years of income | Total needed | Gap to fill |
|---|
Life insurance cover: real examples
Three situations where the two methods disagree. Click any card to load it.
- A young family
$80,000 income, mortgage, two children
Ten years of income at 70%, a $250,000 mortgage, education for two.
The detailed method says $945,000 is needed and you have a $795,000 gap. The quick rule says $800,000 - $145,000 apart.
Load this scenario in the calculator → - Already covered
No mortgage, no children, good savings
A $50,000 income, five years to replace, $600,000 already in place.
The gap is zero. You already have more than the job requires - worth knowing before anyone sells you more.
Load this scenario in the calculator → - How long it lasts
A $1,000,000 payout drawn at $20,000 a year
Invested rather than spent, with prices rising.
It never runs out. Growth after inflation covers the drawings, which is a strong argument against buying more.
Load this scenario in the calculator →
Common questions about life insurance cover
How much life insurance do I actually need?
It depends what the money has to do. Add up the jobs: clear the mortgage, clear other debts, cover the funeral, replace your income for as long as your family needs it, and pay for education if you have children. Then take off what you already have. That is your gap. This tool does it that way, and also shows the quick rule-of-thumb answer so you can see how far apart they are.
Why do two methods give different answers?
Because one is a shortcut. A multiple of your income is quick and easy to sell, but it ignores your mortgage, your debts, your children and what you already own. Adding up the actual jobs takes longer and gets much closer to the truth. When the two disagree sharply, trust the detailed one.
Should I count what I already have?
Yes, always. Cover through work, an old policy, savings and investments all reduce what you need to buy. A tool that ignores them will sell you more than you need. Be careful with cover through work though - it usually ends the day the job does.
How many years of income should I replace?
A common approach is until the youngest child finishes education, or until a partner could reasonably support themselves. Some people go to retirement age. The table on this page shows what each length costs so you can see the trade rather than guess.
Term or whole life?
Term covers you for a set number of years and is far cheaper for the same payout. Whole life lasts your whole life and builds a cash value, which makes it much more expensive. Most people with children and a mortgage need a large payout for a limited period - which is exactly what term is for.
Will the payout run out?
It depends whether it is spent or invested. This tool shows how long a payout would last if it were invested and drawn down, allowing for both growth and rising prices. Sometimes the answer is "forever", which is a useful thing to know before buying more than you need.