Insurance / Insurance Planning
Life Insurance Coverage Needs Calculator (Income Replacement Method)
Income Replacement
Until youngest child is independent
Typically 60-80%
Debts & Obligations
Mortgage, car loans, credit cards, student loans, etc.
Future Costs
4-year total
Existing Resources
Liquid assets available to family (not including retirement accounts)
How to Use This Calculator
Calculate how much life insurance coverage you need using the income replacement method. This ensures your family can maintain their lifestyle and meet financial obligations if you pass away.
The Formula:
Coverage = (Income × % to replace × Years) + Debts + Future costs - Existing savings
Key Inputs:
- Years to Replace: Until youngest child is independent (typically 10-20 years)
- Replacement %: 60-80% of income (some expenses like commuting disappear)
- Debts: Mortgage, loans that family would need to pay off
- Future Costs: College education, final expenses
Tip: Term life insurance is usually the most affordable way to cover income replacement needs.