Life Insurance Needs Calculator
Add up what your family would need, subtract what you already have, and see the gap. It takes about 3 minutes, and the math runs on your device.
Most people guess at this number. I'd rather you see the math. Add up the bills your family would have to pay, the income they would lose, and any college you want covered. Then subtract what you already have. What's left is roughly how much life insurance it would take to close the gap.
1. Bills that would be due right away
Funeral, burial or cremation, and final medical bills.
What you still owe on your home. Leave it blank if you'd rather your family keep making payments from income.
Car loans, credit cards, student loans, and anything else you'd want paid off.
2. Income your family would need
Think about what your family spends in a year, not counting the debts above.
For example, until your youngest finishes school or your spouse retires.
3. College (optional)
The College Board puts the average cost of an in-state public four-year college at $25,850 a year for tuition, fees, housing, and food (2025-26). Resident tuition and fees alone at the University of Utah are about $10,850.
4. What you already have
Checking, savings, and brokerage accounts. Count retirement accounts only if your family could use them, and remember that withdrawals may be taxed.
For example, a second property or a business interest. Most families keep their home, so it usually doesn't belong here.
Include coverage through work, but remember it usually ends if you leave the job.
Assumptions
Prices rose about 2.8% a year on average from 1985 to 2025.
What the money might earn each year after taxes. A lower rate is more cautious and shows a bigger need.
See the year-by-year math
This shows how the money would last if your family received $0 of new coverage plus the $0 you already have, paid the bills above right away, and earned 6% a year on what's left.
| Year | Starting balance | Income paid | College paid | Growth | Ending balance |
|---|---|---|---|---|---|
| Enter yearly income or add a child to see the table. | |||||
How the math works
The calculator adds up three things. First, the bills that would be due right away, at full value. Second, the income your family would need each year, raised by inflation and then discounted back to today at the after-tax rate you entered. Third, the same thing for each year of college. Then it subtracts your savings, anything your family would sell, and the life insurance you already have.
The rate you pick matters a lot. A higher rate assumes the money grows faster, so it shows a smaller need. If you're not sure, I'd use a lower rate. It's the more cautious choice.
What this calculator leaves out
It doesn't subtract Social Security survivor benefits. A surviving spouse age 60 or older, a spouse of any age caring for a child under 16, and unmarried children under 18 may qualify. Social Security explains who can get survivor benefits at ssa.gov.
It also doesn't count taxes on retirement account withdrawals, changes in what your family spends, or the cost of childcare. If a parent who stays home died, the family might have to pay for things that parent does for free. Add that cost to the income line.
And it can't tell you what the coverage costs. That depends on your age, health, and the insurance company. I can shop that for you.
Frequently asked questions
How much life insurance do I need?
Enough to pay the bills that would be due right away, replace the income your family would lose for as long as they'd need it, and cover goals like college, minus what you already have. That's what this calculator adds up. Rules of thumb are a rough start, but your debts, your kids' ages, and your savings matter more.
What is the DIME method?
DIME stands for debt, income, mortgage, and education. You add those four up to get a rough coverage amount. This calculator uses the same idea, then adjusts for inflation and what the money could earn, and subtracts what you already have.
What is human life value?
Human life value estimates what your future earnings are worth today. It answers a slightly different question: what your family would lose, not what they would need. I think the needs method on this page is more useful for most families because it starts with real bills and real goals.
Should I count life insurance I have through work?
You can, but be careful. Coverage through work usually ends if you leave the job. LIMRA found the median basic life insurance offered at work is $20,000 or one year of salary, which usually isn't enough by itself. Source: LIMRA, 2025 Facts About Life Insurance and Workplace Benefits.
Why does the rate of return change my answer so much?
Your family would need less money today if it's assumed to grow faster. Over 20 or 30 years, a small change in the rate adds up. If you're not sure what to enter, a lower rate is the more cautious choice.
Is this a quote?
No. It estimates how much coverage you might need. The price depends on your age, health, and the insurance company. If you'd like a real number, I can shop it for you at no cost.
Matt Harden, Licensed Utah Insurance Producer
- Woods Cross, Utah
- Mon–Sat 8am–8pm
I personally call back within 5 minutes during business hours.