Insurance Need Calculator
Estimate life cover from income to replace, debts, mortgage, education, and existing coverage.
Written by Golam Rabbani, Founder & Lead Engineer
How to use this insurance need calculator
- Enter your annual income and the number of years of income to replace for your dependants.
- Add outstanding debts (credit cards, personal loans, car loans).
- Add the current balance on your mortgage.
- Add any future obligations like children's education or care for an elderly parent.
- Add existing life insurance coverage plus liquid savings already earmarked for these needs.
- Pick your currency and press Calculate to see your recommended coverage gap.
- Use Copy to save the breakdown or Reset to clear all fields.
About this insurance need calculator
The insurance need calculator estimates how much life cover you should consider buying. It uses a DIME-style approach — Debt, Income, Mortgage, Education — and then subtracts what you already have so the result is the gap, not double-counted cover.
The formula is: income_replacement = annual_income × years_to_replace; total_need = income_replacement + debts + mortgage + education; recommended_coverage = max(0, total_need − existing_cover_and_liquid_savings).
Worked example: income 60,000, replace for 10 years, debts 8,000, mortgage 180,000, education 40,000, existing cover plus liquid savings 25,000. Income replacement = 60,000 × 10 = 600,000. Total need = 600,000 + 8,000 + 180,000 + 40,000 = 828,000. Recommended coverage = max(0, 828,000 − 25,000) = 803,000.
This is a rough planning number. It does not model inflation on future expenses, social security survivor benefits, the time value of a lump-sum payout, or the difference between term and permanent insurance. A licensed adviser can refine the figure for your dependants, tax situation, and term length. Not financial advice.
FAQ
- Why does the tool use a DIME-style formula?
- DIME (Debt, Income, Mortgage, Education) is a widely taught starting point because it covers the four obligations a household typically faces if a primary earner dies: pay off debts, replace income for dependants, clear the mortgage, and fund children's education. It gives a defensible ballpark in seconds.
- How many years of income should I replace?
- A common range is 7–15 years, weighted toward the higher end if you have young children or a stay-at-home partner, and lower if your spouse already earns a full income and dependants are near adulthood. Re-run the tool with a couple of values to see the sensitivity.
- What counts as “existing cover and liquid savings”?
- Anything that would be available to your dependants in the same scenario: existing term or whole-life policies (face value), employer-provided life insurance, emergency savings, taxable investments you would expect them to draw down. Do not count retirement accounts unless your spouse would access them without penalty.
- Why isn't inflation included?
- Adding inflation makes the formula more accurate but harder to reason about. As a shortcut, increase your years_to_replace by 10–20% to give a rough inflation buffer, or use a larger education figure to fund tuition in future dollars.
- Does this work for disability or critical illness cover?
- The same logic helps you think about it (replace income, clear debts) but the products are priced very differently. Use this result as an income-replacement target and shop disability cover separately.
- Is anything stored or sent to a server?
- No. All calculation runs in your browser; nothing is sent or saved. Closing the page clears every input.