Life Insurance Calculator: Calculate Amount You Should be Insured For

Life insurance is a contract between the policy holder and the insurer, where the insurer promises to pay a designated beneficiary a sum of money a "premium" upon the death of the insured person. If you have a family that's dependent on your income, then you need life insurance. The calculator below helps you figure out exactly how much life insurance you should have.

So, how much life insurance do you need?

The answer isn't really how much life insurance you need... it's how much investment capital your family will need at the time of your death. By providing some basic information on your family's resources, debt and expenses, current life insurance coverage and future income needs, the calculator will give you an estimate of the amount of needed life insurance coverage. This calculator assumes your survivors will invest your insurance proceeds and then draw down the account gradually.

Annual income needs equals the total amount your family needs, before taxes, to maintain their current standard of living, typically 60%-75% of total income. Families with higher incomes typically fall into the lower end of that range.

Need a means to support yourself and your family if you become critically ill or die? Critical Illness Insurance cover pays out a cash sum if you're diagnosed with one of the defined critical illnesses or upon your death. Also see our article on Choosing Between Disability Insurance and Critical Illness Insurance

Please remember that the amount of life cover you need should be reviewed regularly and as your financial circumstances change. If you are unsure of the amount of cover you require you should speak to an Independent Financial Adviser.

Calculate how much life insurance you need if your survivors invest the life insurance benefits they receive.