How much life insurance do I need?
Use this life insurance needs calculator for one insured person at a time. Someone who earns an income may leave a gap in the household budget. Someone who provides unpaid childcare may leave the household with a new expense. Start with what the surviving household would spend and receive. Texas Department of Insurance life insurance guide
Which household figures belong in the plan?
- Costs due once
- Gather debt balances you intend to pay off, education funds you want to set aside, final expenses and any immediate care costs. Use an amount still needed after funds already dedicated to that purpose.
- Support over time
- Use either an annual income shortfall you have already worked out, or the monthly spending, replacement care, reliable survivor income and confirmed benefits behind it. In monthly mode, give each component its own end year when it will stop early.
- Money available now
- Count savings or investments the surviving household could use for this plan. If you already subtracted an education fund from the college expense, leave the same money out of available assets.
- Life insurance already in force
- Check the death benefit for the person you are modeling, including confirmed workplace coverage payable to the household. Use each policy once. Ask the insurer for the payable amount if the policy has loans or prior benefit payments. TDI on loans and death benefits
The VA’s consumer worksheet also separates immediate obligations, continuing income needs and available resources. Veterans and service members can use their actual benefit records when gathering inputs. VA guide to estimating life insurance needs
What changes when support lasts five more years?
Suppose a household would need $30,000 a year after surviving income and benefits. It also wants $45,000 for debt, $20,000 for education and $10,000 for final expenses. It has $50,000 available and $100,000 of life insurance. Keep the real discount rate at 0% to isolate the effect of time.
| Plan component | 10 years | 15 years |
|---|---|---|
| One-time obligations | $75,000 | $75,000 |
| Ongoing support | $300,000 | $450,000 |
| Less assets and existing coverage | −$150,000 | −$150,000 |
| Additional modeled coverage | $225,000 | $375,000 |
The five extra years add $150,000 because the annual shortfall continues through all five. When a cost or benefit has an earlier end date, use the monthly schedule to see which years actually change.
What happens when childcare and benefits end at different times?
Consider a family with $4,000 of usual monthly spending and $2,500 of reliable monthly income for ten years. It expects to hire childcare for $900 a month for the first three years. It has also confirmed a $500 monthly benefit for the first five years. All amounts are hypothetical.
| Years | Monthly shortfall | Support for that period |
|---|---|---|
| 1–3 | $1,900 | $22,800 × 3 = $68,400 |
| 4–5 | $1,000 | $12,000 × 2 = $24,000 |
| 6–10 | $1,500 | $18,000 × 5 = $90,000 |
Ongoing support totals $182,400 at a 0% real discount rate. Using the earlier example’s $75,000 in immediate obligations and $150,000 in resources gives $107,400 of additional modeled coverage.
For your own family, price the extra hours of care you would need beyond what you already pay. The U.S. Department of Labor publishes historical county childcare prices by age and care setting for 2008–2022. A current local provider estimate is more relevant to a new plan. National Database of Childcare Prices
How the calculator arrives at a coverage gap
- Estimate each year’s shortfall. Use the direct annual shortfall, or add active monthly spending and care costs, subtract surviving income and benefits, then multiply by 12. A surplus in one year contributes zero need for that year.
- Convert support to today’s dollars. Each year-end shortfall is divided by (1 + r)t and the results are added. Here t is the year after death and r is the real annual discount rate as a decimal. A 0% rate simply adds the annual amounts. Use current-dollar inputs throughout.
- Account for one-time needs and resources. Add immediate obligations, then subtract available assets and individual and workplace coverage payable today. Show zero additional need when those resources cover the modeled total.
A blank component end year in monthly mode follows the selected support horizon. Set an explicit end year to keep it fixed when you compare a longer horizon. At a horizon of zero, the calculation compares only immediate obligations with available resources.
Questions about your coverage estimate
How do I turn a coverage estimate into a life insurance quote?
Use the additional coverage from your result as a starting face amount when asking insurers for prices. For example, the 10-year household scenario above shows a $225,000 coverage gap. Request quotes on the same insured person, amount, policy type and term so the premiums are comparable. Then use the life insurance cost calculator to budget a written premium. If you have two term quotes with different price guarantees, compare their common guaranteed years. Texas guidance on life insurance prices
Should I include both a mortgage payoff and monthly mortgage payments?
Choose how your scenario handles the debt. If the plan pays the mortgage off immediately, include that payoff once and remove the corresponding loan payments from future spending. Keep ongoing expenses such as property taxes and homeowners insurance in the household budget. If the plan keeps making loan payments, include those payments for their duration and leave that same payoff out of immediate debt. CFPB guide to mortgage payment components
How should I enter Social Security survivor benefits?
Use a monthly amount and duration confirmed for the surviving household. Eligibility and payments depend on the worker’s record and family circumstances. If you are still checking, compare a scenario that assumes $0 with another using the confirmed amount once available. Keep identifying information out of this worksheet. SSA eligibility information · SSA survivor benefit amounts
How do I count coverage from work?
Check the current benefits statement for the insured person and enter the confirmed workplace death benefit once. Verify the terms again if employment changes. For federal employees enrolled in FEGLI, OPM explains how to confirm coverage with the appropriate HR office or personnel record. Texas group life guidance · OPM FEGLI coverage verification
Does a 15-year support plan mean I need a 15-year term policy?
A support horizon describes how long the household uses resources after the modeled death. A term policy describes the period during which a covered death can trigger its benefit. Use the term life insurance calculator to compare how two terms line up with your family’s milestones. Then ask an insurer for written quotes at your chosen coverage amount. Pricing also depends on underwriting and policy features. Texas guide to term life and premiums
How do I use an existing whole-life policy in the worksheet?
Ask the insurer for the death benefit payable under the current policy. Count that amount once. A whole-life illustration can also show surrender values and non-guaranteed amounts at future dates. Check what the policy would actually make available to the household before counting an additional asset. Use the whole life insurance calculator to compare surrender values and death benefits. California guide to life insurance illustrations
Sources and assumptions
Insurance Calculator publishes this household model and its examples. The linked state and federal sources explain insurance terms, existing benefits and care costs. Your entries determine your result. You choose the support periods and real discount rate. The worksheet treats each year’s shortfall as due at year end.
Source guidance and example arithmetic checked November 5, 2026.