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How Much Life Insurance Do I Need? A Coverage Calculator That Shows Its Math

Last checked

It sits under our life insurance guide and follows the same pattern as our car insurance coverage calculator: it returns an amount of coverage and the reasoning behind it, never a premium.

Key takeaways

  • The calculator adds up what your family would need (income, debts, mortgage, education, final expenses) and subtracts what they would already have (existing coverage, savings, survivor benefits).
  • Every line comes from the questions in the NAIC Life Insurance Buyer's Guide. Nothing is hidden in a multiplier.
  • It shows the NAIC's "five to eight times your income" rule of thumb beside the result, so you can see why your number differs.
  • It never outputs a price, a quote or a savings figure.

Work out your number

Add up what your family would need, then subtract what they would already have. Every line shows where it comes from. This calculator runs in your browser and does not send the numbers you enter.

Your yearly pre-tax pay.

Share of your income your family would need. Your own costs stop, so 100% is often more than needed.

Years until your youngest child is independent, or your partner retires.

Yearly survivor benefits your family could receive, such as Social Security. Get an estimate from SSA. SSA survivor benefits.

Car loans, credit cards, student loans and other debts, not the mortgage.

What you still owe on your home.

Total you want set aside for children's education.

NFDA 2023 medians: direct cremation $2,750; funeral with viewing, then cremation $6,280; funeral with viewing, then burial $8,300 (the default). Each excludes a vault, cemetery, monument and cash-advance items. Cemetery costs such as a plot and opening the grave are extra.

Gifts, a charity, estate taxes or anything else.

Life insurance you already have, including group coverage at work. Group life insurance usually ends when you leave your job.

Savings and investments your family could use. Leave out money you want kept for retirement.

Your estimate

This calculator needs JavaScript. The method: add the income your family would need (income times the share to replace, minus survivor income, times the years) to debts, mortgage, education, final expenses and other goals, then subtract existing coverage and savings.

Worked example, step by step

Inputs: income $70,000; share to replace 80%; 10 years; survivor income $18,000 a year (the person's own estimate from an SSA statement); other debts $15,000; mortgage $210,000; education $80,000 (two children at $40,000 each); final expenses $8,300 (NFDA burial preset); other goals $0; existing coverage $70,000 (group life at one times salary); savings $25,000.

Income need: $70,000 x 0.80 = $56,000. Income gap: $56,000 minus $18,000 = $38,000. Income to replace: $38,000 x 10 = $380,000.

Total need: $380,000 + $15,000 + $210,000 + $80,000 + $8,300 + $0 = $693,300. Resources: $70,000 + $25,000 = $95,000. Net need: $693,300 minus $95,000 = $598,300, shown as $600,000.

Rule of thumb range: $350,000 to $560,000. The result sits above it because the mortgage and education goals are large relative to income.

How this calculator works

The questions come from the NAIC Life Insurance Buyer's Guide: how much of the family income you provide, whether you would set money aside for a child's education, how your family would pay final expenses and repay debts, and how inflation would affect future needs. It then says to count existing life insurance, group coverage at work, Social Security and pension survivor benefits, and savings.

Income to replace is your income times the share your family would need, minus yearly survivor income (never below $0), times the number of years. Debts, mortgage, education, final expenses and other goals are added. Existing coverage and savings are subtracted, and the result never goes below $0.

The result is rounded up to the nearest $10,000 because policies are sold in round face amounts. The breakdown shows the unrounded figure so every line adds up.

No inflation or investment return is applied, to keep every line checkable. Final expense presets are 2023 medians from the NFDA General Price List Study, as published in the 2025 NFDA Cremation and Burial Report.

Worked example

Worked example: needs add up to 693,300 dollars, existing resources of 95,000 dollars leave a net need of 598,300 dollars Worked example, step by step Income gap $380,000 Mortgage $210,000 Education $80,000 Other debts $15,000 Final expenses $8,300 Total need $693,300 Minus resources $95,000 Net need $598,300 Shown as $600,000 (rounded up to the nearest $10,000)
Bars drawn to scale from the worked example above. Final expense figure is the NFDA 2023 median for a funeral with viewing and burial, vault excluded.

The result sits above the five to eight times range because the mortgage and education goals are large relative to income.

FAQ

Is this calculator's number what I should buy? It is a starting point built from your own inputs. The California Department of Insurance says to balance the amount against what you can afford, since both under- and over-insuring cause problems.

Why does it subtract my group life insurance? Because the NAIC buyer's guide says to count group insurance where you work. Keep in mind TDI's warning that group coverage usually ends when you leave the job.

Where do I get a Social Security survivor estimate? From SSA. Its survivor benefits page says spouses' payments start at 71.5% of the deceased spouse's benefit and children generally get 75%, subject to a family maximum. Your Social Security statement or SSA can give you an estimate.

Why doesn't it adjust for inflation? To keep every line checkable. The result tells you the number is in today's dollars and that rising costs could raise what your family needs.

Does it include funeral costs? Yes, through the final expense line. Defaults come from the NFDA's 2023 median prices, and you can type your own figure.

Sources

This calculator is general information, not insurance, tax or financial advice. It estimates a coverage amount only and does not quote premiums.