Cover schedule
| Debt clearance | $15,000 |
|---|---|
| Income replacement | $650,000 |
| Mortgage repayment | $250,000 |
| Education fund | $100,000 |
| Total need | $1,015,000 |
| Less existing cover & savings | −$20,000 |
Recommended cover
$1,000,000
Indicative premium /month
$70.00
Level term assurance, healthy applicant. Illustrative only — not a quote.
Why use a life insurance calculator?
The rule of thumb you’ll hear most often in the US — “buy 10 times your salary” — is a blunt instrument. It ignores your mortgage balance, how many children you have, whether your spouse works, and what group coverage you already carry through your employer. For some households 10× income is far too much; for a single-earner family with a big mortgage and three kids it can be dangerously little.
This calculator replaces the rule of thumb with your actual numbers. It totals the obligations that would outlive you, subtracts the resources your family could already draw on, and shows the gap — the amount of term life coverage actually worth paying for.
The premium estimate assumes level term life, the coverage type most American families should look at first: a fixed death benefit, a fixed premium, and a defined term of 10, 20 or 30 years. Term life is dramatically cheaper than whole life for the same death benefit, which is why most fee-only financial planners recommend it for income protection.
How the calculation works: the DIME method
DIME is the sizing framework most widely used by US planners: Debt, Income, Mortgage, Education.
Debt means non-mortgage balances — auto loans, student loans (note that federal student loans are discharged at death, but most private ones are not), credit cards and personal loans. Income is your annual take-home pay times the number of years your family would need it replaced; ten years is a common default with young children. Mortgage is your outstanding principal so the house is paid off. Education is a lump sum per child — the calculator defaults to $100,000 per child, roughly in line with four years at an in-state public university including room and board.
The calculator then subtracts existing coverage (individual policies plus employer group life, commonly 1–2× salary) and liquid savings, and rounds the result up to the nearest $25,000 — the increments most US carriers actually quote in.
Frequently asked questions
A healthy 30-year-old non-smoker typically pays around $15–$25 per month for a $500,000, 20-year term policy. Rates roughly double for smokers and climb steeply after age 50. The figure this calculator shows is an indicative estimate; real pricing depends on your health class after underwriting.
Death benefits are generally free of federal income tax for the beneficiary. Very large estates can face estate tax considerations, and interest earned if the payout is left on deposit is taxable — but for most families the benefit arrives income-tax-free.
Employer group life is usually capped at 1–2× salary and typically ends when you leave the job. Enter it under “existing cover” — for most households with a mortgage and children it covers only a fraction of the real need.
For pure income protection, term life buys 5–10× more death benefit per premium dollar. Whole life combines insurance with a savings component and permanent coverage, at a much higher cost. Most independent advisers suggest buying term and investing the difference unless you have a specific permanent need, such as estate planning.
No. Everything is computed locally in your browser. Nothing you enter is sent to a server, saved or shared.
Match the term to your longest obligation: a 30-year term for a fresh 30-year mortgage or a newborn, 20 years for school-age kids, 10 years if the mortgage is nearly paid and children are near independence. Shorter terms are cheaper per month.
This tool provides general information and indicative figures only. It is not financial, legal or tax advice, and it is not an offer or quote for insurance. Premium estimates assume a healthy applicant on level term coverage; actual rates are set by insurer underwriting. Consider consulting a licensed insurance professional or fee-only financial planner.