Life Insurance Needs Calculator (2026)

This is the decision with the largest financial consequence, and the one where the incentives of the person advising you are least aligned with your interests. Permanent policies pay substantially higher commissions than term policies.

Term insurance covers a fixed period — commonly 10, 20 or 30 years — and pays only if you die within it. It is inexpensive because most policies never pay out. Permanent insurance covers your whole life and includes a cash value component, and it typically costs several times more for the same death benefit.

The case for term is straightforward: insurance need is usually temporary. It peaks when children are young and a mortgage is large, and falls as both resolve. By the time a 30-year term expires, the mortgage is typically paid, the children independent, and retirement assets accumulated — the need has genuinely gone.

Permanent insurance has legitimate uses: estate liquidity for large taxable estates, providing for a dependant with lifelong needs, or certain business succession arrangements. Those are real but narrow. For the ordinary purpose of protecting a young family, term does the job at a fraction of the cost.

Needs analyses tend to omit the same categories, and each omission understates coverage.

The non-earning spouse —

a parent providing full-time childcare delivers services that would cost real money to replace. Their death creates a genuine financial burden even with no salary lost.

Inflation over the support period —

a fixed benefit supporting a household for 15 years loses purchasing power throughout. Either size for it or plan to invest the proceeds.

The surviving spouse's earning capacity —

grief, single parenting and reduced flexibility often mean reduced income, not the same income.

Employer coverage ending —

group life insurance usually terminates with employment and is rarely portable. It is a supplement, never the foundation.

Childcare costs after a death —

a surviving parent working full-time may need paid childcare that was previously unnecessary.

Age and health dominate everything else, and both move in one direction. Premiums rise steeply with age, so a policy bought at 30 costs dramatically less than the same coverage bought at 45 — and every year of delay is permanent, because the rate is set at issue and locked for the term.

Health underwriting matters just as much. Policies are priced from a medical examination, medical history and family history. A condition diagnosed between now and application can move you into a higher rate class or make coverage unavailable, which is the strongest argument for buying before you think you need it.

Tobacco use typically doubles the premium or worse. Most insurers require a period of cessation — commonly 12 months or more — before non-smoker rates apply.

Because pricing varies substantially between insurers for the same risk, comparing several is genuinely worthwhile. An independent broker who quotes multiple carriers is usually better placed than an agent representing one.

Life insurance solves a specific problem, and where the problem does not exist neither does the need.

A single person with no dependants and no co-signed debt generally needs only enough to cover final expenses. Federal student loans are discharged at death; private loans with a co-signer may not be, which is the main exception worth checking.

A retired household living on assets that pass to the survivor typically has no income to replace. A financially independent household is in the same position.

Children almost never need life insurance. Policies marketed for children are sold on sentiment and on a savings component that performs poorly. The exception is genuinely narrow: guaranteeing future insurability for a child with a condition likely to make later coverage difficult.