Life Insurance:
How Much
is ENough?
The purpose of life insurance is to maximize protection. If someone depends on your financially, you need life insurance.
Term life insurance is typically the lowest cost which allows for the maximum amount of coverage for a critical period.
C L A R I T Y A D V I S O R S
Life Insurance Needs Calculator
Protecting what matters most
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Who Are We Protecting?
Let's start with the basics about your household.
We'll use their ages to figure out how long your family needs income protection (typically until each child is 25).
What Hits Your Bank Account?
Forget gross income — we want what actually lands in your account after taxes and withholdings. This is the real number your family lives on.
The amount deposited into your bank account each pay period, after all withholdings.
The amount deposited into your bank account each pay period, after all withholdings.
Debts & Mortgage
These are the debts the insurance proceeds would pay off immediately, so the survivor doesn't have to carry them. Don't include car payments, property taxes, or homeowners insurance — those are ongoing living expenses your income replacement will cover.
Mortgage
The payoff amount on your home loan.
Principal & interest only — not taxes or insurance.
We'll use this (or the time until your youngest turns 25, whichever is longer) to determine the coverage term.
Student loans, credit cards, medical bills, personal loans — debts that would be paid off with the insurance lump sum. Enter each one with its monthly payment and current balance.
$0/mo
Mortgage P&I + all additional debts
$0
Mortgage balance + all additional balances
Assumptions
These assumptions drive the present value calculation — how much money needs to be invested today to generate the monthly income shortfall over time. You can adjust them.
Conservative long-term return on invested insurance proceeds. The FNA standard is 4%.
Annual cost-of-living increase applied to the income need. Set to 0 for a simple PV calc.
Leave blank to auto-calculate from mortgage term or youngest child reaching age 25 (whichever is longer). Enter a number to override.
Your Coverage Analysis
Net Into the Home (Combined)
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Less debt payments: —
What the Family Lives On
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If — Dies
Surviving: —
—/mo shortfall
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Present value of income need
If — Dies
Surviving: —
—/mo shortfall
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Present value of income need
| Life Insurance Analysis | If — Dies | If — Dies |
|---|---|---|
| Monthly Income Need | — | — |
| Number of Years | — | — |
| Funds Needed to Provide Income Goal | — | — |
| IMMEDIATE CASH NEEDS | ||
| Payoff Mortgage | — | — |
| Payoff Consumer Debt | — | — |
| Final Expenses | — | — |
| Total Immediate Cash Needs | — | — |
| Total Life Insurance Needed | — | — |
Recommended Coverage
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Assumptions Used
Disclaimer: This analysis provides estimates for educational purposes only and does not constitute financial or insurance advice. Actual coverage needs vary based on individual circumstances, health, and insurer underwriting. The present value calculation assumes a level rate of return and does not account for taxes. Consult a licensed insurance professional before purchasing a policy.