The variables used in our online calculator are defined in detail below, including how to interpret the results.
When figuring out your monthly living expenses, you need to consider rent, property taxes, household expenses, cost of insurance, and childcare. If you own a home, pay careful attention to the instructions in the outstanding debt section appearing below.
This is the total number of years that you want to cover these expenses. Typically, you would use the number of years until retirement, or your life expectancy years.
These are large / onetime expenses you might want to consider insuring. These are expenses such as college tuition, a child's wedding expense, funeral cost, or the care of your parents.
This would be the total of all your outstanding debt such as credit card balances, student loans, and outstanding mortgages, if you own a home. If you decide that you want to pay off a mortgage, you need to make sure you remove your monthly mortgage payment (principal and interest, not property taxes) from the monthly living expenses section.
These are the assets you've acquired that can be used to pay off some of your outstanding debt, or to help meet your monthly expenses. Here you should consider savings and other bank accounts, investments such as stock, other life insurance, as well as the equity you have in your home.
The results of this calculator are an estimate / recommended amount of life insurance coverage that you need. More detailed estimates can be obtained through a life insurance carrier or agent.
This is the total amount of life insurance you would need to meet the obligations outlined in the previous sections of this calculator.