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Life insurance is designed to help provide financial support to your loved ones after you pass away. If you’re wondering “How much life insurance do I need?” a calculator could help. Bankrate’s life insurance calculator helps you hone in on the factors that affect the level of life insurance coverage you may want to buy. We’ll walk you through how to use our calculator and how to find the best life insurance rates for your situation. While a calculator can help you estimate life insurance levels and costs, you may still want to work with a licensed agent or financial planner to ensure that your coverage level fits your needs.
To calculate your life insurance coverage level with our tool, you’ll fill in the required fields. These include your estimated burial expenses, the number of income-earning years you’ll want to replace for your beneficiary, the net income of your survivors, the values of your current investments and savings, the number of children your survivor will need to support and if you want to account for funding any one-time expenses for your survivors, like college expenses or a gift to charity.
Keep in mind that this is a death benefit calculator, which means you are estimating how much life insurance to buy. This tool is not a life insurance premium calculator and won’t show you how much life insurance will cost for you. While you may be able to find a life insurance cost calculator, your best bet is to get a life insurance quote from a company that suits your needs. Only an actual quote will give you an accurate idea of how much your life insurance will cost.
If you’re trying to calculate your life insurance premium, there’s no better way than to obtain and compare life insurance quotes. Each life insurance company calculates rates slightly differently, so to know how much you’ll pay, you might want to get quotes from a few different carriers.
Understanding the factors that affect life insurance rates might also help you get a lower price:
Because you can buy life insurance for a variety of reasons, there is no single formula for calculating how much coverage you need. If you are using life insurance as a way to replace your lost income for a loved one should you pass away, you could multiply your annual salary by the number of years you have left until retirement, but this won’t account for covering any debts or leaving a financial gift. The amount of life insurance you need is personal to your unique situation.
It depends on your needs. If you’re only buying coverage to provide a loved one with financial protection if you pass away before a debt is paid, you may only need coverage for the length of that debt. For example, if you’re covering your contribution to a mortgage payment, a 15- or 30-year term life insurance policy could be a good option, depending on the length of your mortgage. Others opt for permanent life insurance, which lasts until your death (assuming the premiums are paid) and has no term period.
Life insurance companies all have their own proprietary algorithms for pricing life insurance policies. Most companies use the same metrics though, including your age, health and habits such as smoking. If you’re trying to find a low life insurance rate, shopping around might help, but the most impactful thing you can do is to stay as healthy as possible. Term policies are usually cheaper than permanent policies, and the more coverage you purchase, the more you’ll pay.
See which provider is right for you.
Whole life insurance combines life insurance with an investment component.
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
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