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Life insurance calculator How much coverage do you need

Life insurance is designed to help provide financial support to your loved ones after you pass away. If you're wondering "How much life insurance do I need?" a calculator could help. Bankrate's life insurance calculator helps you hone in on the factors that affect the level of life insurance coverage you may want to buy. We'll walk you through how to use our calculator and how to find the best life insurance rates for your situation. While a calculator can help you estimate life insurance levels and costs, you may still want to work with a licensed agent or financial planner to ensure that your coverage level fits your needs.

How to use our life insurance calculator

To calculate your coverage level with our tool, you'll fill in the required fields. These include your estimated burial expenses, the number of income-earning years you'll want to replace for your beneficiary, the net income of your survivors, the values of your current investments and savings, the number of children your survivor will need to support and if you want to account for funding any one-time expenses for your survivors, like college expenses or a gift to charity. Keep in mind that this is a death benefit calculator, which means you are estimating . This tool is not a life insurance premium calculator and won't show you how much life insurance will cost for you. While you may be able to find a life insurance cost calculator, your best bet is to get a life insurance quote from a company that suits your needs. Only an actual quote will give you an accurate idea of .

How to calculate how much life insurance to get

Here are some additional steps you can take to decide how much life insurance to buy: Decide why you're buying coverage: To figure out how much life insurance to buy, you'll first need to understand . Your reason for purchasing coverage - be it to help a loved one pay off a debt, to replace your income when you are gone or to leave a financial gift - will play heavily into the amount of coverage you purchase. Decide what type of policy you want: There are several different and they all work differently. Knowing what type of policy you're looking for may help you decide how much coverage you need. Review your annual salary: If you are using life insurance to replace your income for a loved one, you may want to multiply your annual income by the number of years you have until retirement. That way, if you pass away, your loved one will receive a death benefit equal to the amount of money you would have contributed to the household. Think about your debts: If your life insurance is to pay off a debt, you may only need enough coverage to equal the principal amount of that debt. You could also use your life insurance to leave a financial gift for your beneficiaries, in which case the amount is up to you. Decide if you want to leave a financial gift: You could also use your life insurance to leave a financial gift for your beneficiaries, in which case the amount is up to you. You may want to leave a sizable amount to a charity or make your intentions known that your life insurance death benefit should be used to pay for a child's college expenses. Assess your assets: If you already have significant assets, like a large amount of savings or investment funds, you may not need as much life insurance as someone who has less wealth built up. Work with an agent: If you're still feeling unsure about deciding how much life insurance to buy, you may want to work with an agent or certified financial planner. These professionals can help you assess your situation and determine what type and level of coverage is right for you.

How to get the best life insurance rates

If you're trying to calculate your life insurance premium, there's no better way than to obtain and . Each life insurance company calculates rates slightly differently, so to know how much you'll pay, you might want to get quotes from a few different carriers. Understanding the factors that affect life insurance rates might also help you get a lower price: Your age: While you can't do anything about how old you are, even the use your age to calculate your rate. Simply put, life insurance rates are based on the risk of a company paying your death benefit. The older you are, the more likely you are to pass away during the policy period, so the higher your rates will likely be. Your health: To some degree, you can control this rating factor. If you are generally healthy, you'll probably get a premium. If you have chronic health issues, you may want to look for a policy that can be issued without a medical exam, although you should keep in mind that policies that don't require medical exams may be more expensive to account for the risk. Your occupation: Having a career that puts your safety at risk could mean you'll pay higher rates. These jobs might include law enforcement officers, firefighters and active military members. Your hobbies: Just like your job, having risky hobbies could mean you pay higher life insurance rates or that you're denied coverage altogether. Many applications ask if you are a , for example, and your answer may preclude you from coverage with certain carriers. Your habits: Any habits, like smoking or drug use, that put you at a higher risk for health complications or death are likely to either increase premiums or possibly even exclude you from coverage.

Frequently asked questions

Because you can buy life insurance for a variety of reasons, there is no single formula for calculating how much coverage you need. If you are using life insurance as a way to replace your lost income for a loved one should you pass away, you could multiply your annual salary by the number of years you have left until retirement, but this won't account for covering any debts or leaving a financial gift. The amount of life insurance you need is personal to your unique situation.

It depends on your needs. If you're only buying coverage to provide a loved one with financial protection if you pass away before a debt is paid, you may only need coverage for the length of that debt. For example, if you're covering your contribution to a mortgage payment, a 15- or 30-year policy could be a good option, depending on the length of your mortgage. Others opt for , which lasts until your death (assuming the premiums are paid) and has no term period.

Life insurance companies all have their own proprietary algorithms for pricing life insurance policies. Most companies use the same metrics though, including your age, health and habits such as smoking. If you're trying to find a low life insurance rate, shopping around might help, but the most impactful thing you can do is to stay as healthy as possible. Term policies are usually cheaper than permanent policies, and the more coverage you purchase, the more you'll pay. This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. The offers and clickable links that appear on this advertisement are from companies that compensate Homeinsurance.com LLC in different ways. The compensation received and other factors, such as your location, may impact what ads and links appear, and how, where, and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available to you as a consumer. We strive to keep our information accurate and up-to-date, but some information may not be current. Your actual offer terms from an advertiser may be different than the offer terms on this widget. All offers may be subject to additional terms and conditions of the advertiser.

Compare life insurance providers quickly and easily

See which provider is right for you. The amount of coverage you need depends on many factors, including your age, income, mortgage and other debts and anticipated funeral expenses. Whole life insurance combines life insurance with an investment component. Coverage for life Tax-deferred savings benefit if premiums are paid 3 variations of permanent insurance: whole life, universal life and variable life include investment component Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time. Fixed premium over term No savings benefits Outliving policy or policy cancellation results in no money back Find matches Powered by HomeInsurance.com (NPN: 8781838) This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Bankrate Why Lemonade? It's a fresh twist on life insurance: easy, accessible and affordable. See more providers in Choose from insurers in Show More