Tools/Insurance/Life Insurance Needs Calculator✓ CHECKED AGAINST WORKED EXAMPLES · SEP 29, 2026

How much life insurance do I need?

Add up what your family would need if you died, subtract what it already has, and see the year your growing savings could take over so you know how long the coverage has to last.

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Your ageyearsYearly income your family would need replaced$Prefilled from your Money Map as three-quarters of your take-home pay, an example: some of what you earn goes to your own costs. Use what your family would really need each year.Years your family would need ityearsPrefilled as the years to age 65, when you would have stopped working. Use fewer if your youngest child or a spouse’s income would end the need sooner.Real return on the payout% a yearThe 10-year Treasury real yield on September 29, 2026: what safe money earns above inflation. It turns a stream of yearly needs into one lump sum.Debts your family would pay off$Prefilled from your Money Map’s high-interest debt. Add a mortgage and any other loans you would want cleared.Final expenses$A starting figure: the National Funeral Directors Association’s median for a funeral with viewing and burial in its 2023 study. It leaves out the cemetery plot, marker and flowers.Education costs to cover$Optional: the total you would want set aside for children’s schooling. 0 leaves it out.Savings and investments your family could use$Prefilled from your Money Map: what you have invested plus cash. Count only money your family could reach.Life insurance you already have$Include work coverage only if you would keep it: it usually ends when you leave the job.You add to savings each year$Prefilled from your Money Map: take-home pay less spending, to the nearest $100 a month. It is what lets savings catch up with the need.Real return on your savings% a yearThe Money Map’s assumption: 7% before inflation and 3% inflation, about 3.9% after. Everything is in today’s dollars.

INSURANCE TO CONSIDERTHE GAP CLOSES WITHIN TWENTY YEARS

$1.34M

If you died today your family would need $1,770,057: $1,749,757 to replace $84,000 a year for 31 years at a 2.91% real return, plus $12,000 of debts, plus $8,300 of final expenses. Your $429,000 of savings counts against that, leaving $1,341,057 for insurance. The gap closes as the years of support shrink and your savings grow: in 11 years, at age 45, savings alone would cover the need, so a term policy of about 11 years would match it.

Total your family would need

$1.77M

Savings and coverage

$429,000

Savings cover it by

age 45

Term to consider

11 years

UNDERSTAND YOUR RESULT

LIBRARY CHAPTERLife Insurance and a Plan for the People Who Depend on YouWho needs life insurance, how a needs analysis sets the amount, the trade-offs between term and permanent coverage, laddering and conversion, and the beneficiary designations and documents that get the money to the right people.LIBRARY CHAPTERBeneficiary DesignationsWhy the form on a retirement account or policy overrides your will, how to name primary and contingent beneficiaries, the rules for spouses, minors and trusts, and how the 10-year rule taxes an inherited account.

Terms:Beneficiary designation Human capital Term life insurance

What your family would need, and what you would have, by age

What your family would needSavings and coverage

The need falls from $1,770,057 as the years of support shrink, and savings and coverage rise from $429,000. They meet at age 45, 11 years from now; before then the gap is what insurance would cover.

What adds up to the insurance gap

Item	Amount
Income to replace: $84,000 a year for 31 years	$1,749,757
Debts to pay off	$12,000
Final expenses	$8,300
Education	$0
Total your family would need	$1,770,057
Less savings and investments	−$429,000
Less existing life insurance	−$0
Insurance to consider	$1,341,057

The yearly need is turned into a lump sum by discounting each year's payment, made at the start of the year, at a 2.91% real return. That is $1,749,757, 99% of the total. The gap is $1,341,057.

How the gap shrinks over time

In	Your age	Family would need	Savings and coverage	Gap
Now	34	$1,770,057	$429,000	$1,341,057
5 years	39	$1,581,782	$797,753	$784,029
10 years	44	$1,364,470	$1,243,814	$120,656
15 years	49	$1,113,646	$1,783,393	$0
20 years	54	$824,139	$2,436,093	$0
25 years	59	$489,986	$3,225,633	$0
30 years	64	$104,300	$4,180,700	$0
31 years	65	$20,300	$4,394,511	$0

Each row uses the years of support still ahead and the savings you would have by then, with $51,600 added each year at a 3.9% real return. Debts, final expenses and education are held at today's amounts.

What moves the needle

Each row re-runs the calculation with one change. Click to apply.

How it's computed

FORMULA

Income to replace = yearly need × (1 − (1 + r)^−n) ÷ r × (1 + r), each year’s amount paid at the start of the year, r the real return on the payout, n the years

Total need = income to replace + debts + final expenses + education

Insurance to consider = total need − savings and investments − existing coverage, never below zero

Crossover: repeat with n reduced by one each year and savings × (1 + real return) + the yearly saving; the first year the gap is zero is when savings take over

The yearly need is in today's dollars and the returns are real (after inflation), so no inflation forecast is needed. The payout earns 2.91% a year after inflation, the 10-year Treasury real yield on September 29, 2026; a lower rate makes the need larger.
Your savings grow 3.9% a year after inflation with $51,600 added at the end of each year. That is the Money Map's own assumption of 7% before inflation and 3% inflation, and stocks do not earn it steadily.
Debts, final expenses and education are held constant, which is conservative: in practice a mortgage is paid down and children finish school. The final-expense figure is the National Funeral Directors Association’s 2023 median for a funeral with viewing and burial, before the cemetery plot and marker.
Not counted: Social Security survivor benefits, a spouse’s own income and savings, any employer benefit, taxes on savings that would have to be sold, and the cost of a policy. Life insurance proceeds are generally not income for tax purposes (IRC section 101(a)), so no tax is taken from the payout.
A term policy covers a set number of years. The “term to consider” is the years until savings alone cover the need, rounded to whole years; in practice the standard terms are 10, 15, 20, 25 and 30 years.

WORKED EXAMPLE · SAMPLE NUMBERS

$84,000 a year for 31 years at 2.91% real = $1,749,757. Add $12,000 of debts, $8,300 of final expenses and $0 for education: $1,770,057. Subtract $429,000 of savings and $0 of coverage: $1,341,057. In 11 years the need is $1,317,141 against $1,343,674 of savings and coverage, so the gap is closed.

SOURCES

[1]How much life insurance do I need?Fidelity Investments, Learning Center (income replacement and financial obligations methods)[2]Daily Treasury Par Real Yield Curve RatesU.S. Department of the Treasury [3]26 U.S. Code § 101, Certain death benefits (life insurance proceeds)Cornell Law School, Legal Information Institute [4]2023 General Price List Study: median cost of a funeral with viewing and burialNational Funeral Directors Association

HSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026

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Questions about this result

Enough to cover what your family would need that your savings and existing coverage would not. Add up the income they would have to replace for the years they would need it, debts, final expenses and education costs; subtract savings and investments and any insurance you already have. That difference is the gap this page shows.

If your savings and existing coverage already cover the total, the gap is zero and the page says so. Because savings grow and the years of support shrink, the gap usually closes over time; the chart shows the age at which it does, and that is how long a term policy would need to last.

It is a shortcut that ignores your debts, savings and how long your family would need support. The needs approach here starts from those and often gives a very different number, larger for a young family with a mortgage and little saved, smaller for someone with substantial savings and few years left to support.

Generally not as income: section 101(a) of the Internal Revenue Code excludes amounts paid under a life insurance contract by reason of the insured’s death from gross income. Estate tax is a separate matter for very large estates.

Only if you would keep it. Employer-provided coverage usually ends if you leave the job, which is when it could matter most; Fidelity’s guide makes the same point. Enter it in the coverage box if you are confident it will stay.

Roughly until your savings could cover the need on their own, shown as the term to consider. Terms are usually sold in 10-, 15-, 20-, 25- and 30-year lengths, so choose the length at or just above that number.

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