Term Life Insurance Needs Calculator
Term life insurance pays a lump sum if you die during a fixed period, usually 10 to 30 years. The two questions that matter are how much cover your family actually needs and roughly what it costs.
Coverage needed
$1,000,000.00
- Estimated monthly premium
- $120.00
- Estimated annual premium
- $1,440.00
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Cover = income x years replaced + debts + education + final costs - existing cover - savings
- income
- Annual income your family would lose
- years
- Years your dependants need that income
- debts
- Mortgage and other debts to clear
- existing
- Cover and savings already available
How to check the result by hand
- 1
Decide the income to replace
Start from the gross income the household relies on. If two adults earn, insure each separately or size the cover around the income that would actually stop.
- 2
Choose the years of cover
Match the term to the obligation: until the youngest child is independent, or until the mortgage is repaid, whichever is longer.
- 3
Add the debts and future costs
Include the mortgage balance, car and personal loans, a university fund and a realistic figure for final expenses.
- 4
Subtract what already exists
Take off workplace death-in-service cover, older policies and the liquid savings the family could spend. This is the amount you do not need to buy twice.
- 5
Turn the gap into a premium
Divide the cover by 100,000 and multiply by the rate for your age and health band to get an indicative monthly premium, then compare real quotes.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Term Life Insurance Needs page.