Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. The advantage for the policy owner is "peace of mind", in knowing that the death of the insured person will not result in financial hardship for loved ones and lenders.

This calculator will help you to determine your total life insurance needs.  The main objective is to calculate the amount that your family would need to maintain its current standard of living in your absence. You should repeat this calculation whenever your life changes significantly.

  1. Enter the likely values for Expenses and Income
  2. Leave the box set at 0 if a particular question is not relevant to your situation
  3. Click once on the "Calculate" button to calculate your result
Living expenses    
Using the Budget Calculator determine how much money your family will need per month to maintain its current standard of living. Adjust this number up or down to account for things such as diminished expenses in your absence, additional child care expenses in your absence, health care coverage that will disappear should you die, etc. $
Funeral expenses    
Funeral and other expenses run between $4,000 and $10,000. $
Estate administration expenses    
Your spouse will be charged perhaps 5% of your family's asset value to handle the estate. Use the Net Worth Calculator to determine your asset value (not the net worth - the asset value). Multiply by 5% to determine administration expenses. $
Your spouse may have to pay capital gains and other taxes. You will want to see an estate lawyer to minimise this expense, but account for it here. $
Mortgage and other loan payouts    
It would make life much easier for your family if all loans were paid out. $
Education expenses    
If you plan to send your children to private schools or university enter an amount to cover these costs. Be sure to multiply by the number of children. $
Other expenses    
Enter any other expenses you may wish to cover, such as emergencies, cars for the kids, etc., in today's dollars. $
Spouse's Income    
Enter your spouse's annual income after taxes. You may want your spouse to be able to stop working in the event of your death, and if that is the case enter zero here. $
Social Security Income    
Enter the amount of money your spouse will receive from Social Security. If you have children and want to enter a rough but fairly accurate number use $20,000. If you do not have children enter 0. $
Other Income    
Enter the total annual income your spouse will receive from any other sources. $
Years of social security    
Enter the number of years until your youngest child reaches age 18. If you have no children enter 0 here.  
Spouse's age    
Enter your spouse's age.  
Existing Life Insurance    
Enter the value of any existing life insurance policies you have. $
Click this button to calculate the suggested amount of life insurance you need.  


If the Total Life Insurance figure is negative, then you do not need additional insurance otherwise, you should discuss your needs with a licensed insurance specialist