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Insurance Needs Calculator | Life Insurance
Calculator
How much life insurance do you need?
How much life insurance do you need? Enter your current assets, expenses,
income and let us determine how much life insurance you need. You can
also adjust the inflation rate and your expected rate of return to
see how these variables can impact your insurance needs. Press the
report button to see a year by year breakdown of your family's future
income and expenses.
Definitions
- Current life insurance coverage
- Total amount of life insurance coverage you currently have
for yourself.
- Years for insurance income to
last
- Number of years your spouse will need to use
your insurance proceeds to provide for living expenses
and income.
- Inflation rate
- What you expect for the average
long-term inflation rate. This
has been calculated by the
Consumer Price Index from 1925
to 2002 to be 3.1%. Your total
expenses are increased by this
rate for each year you require
income. The income you would
receive from your life insurance
policy is used to cover any
shortfalls between your expected
income from all sources and
your expenses.
- Return
on investments
- The
annual rate of
return for your
investments.
The actual rate
of return is largely
dependant on the
type of investments
you select. The
actual
rate of return
is largely dependant
on the type of
investments
you select. From
January 1970 to
December 2003,
the average
compounded rate
of return for the
S&P
500, including
reinvestment of
dividends, was
approximately
11.7% per year.
During
this period, the
highest 12-month
return was 64%,
and the lowest
was -39%.
Savings accounts
at a bank pay
as little as 1%
or less.
It is important
to remember that
future
rates of return
can't be predicted
with
certainty and
that investments
that
pay higher rates
of return are
subject to higher
risk and
volatility. The
actual rate of
return on
investments can
vary widely over
time,
especially for
long-term investments.
This
includes the potential
loss of principal
on your investment.
- Income
tax
- This
is
your
income
tax
rate.
Changing
this
rate
only
affects
your
interest
income
from
your
investments.
All
other
income
and
expenses
should
be
entered
on
an
after
tax
basis.
- Cash
and
savings
- Total
you
have
in
cash,
checking
accounts,
savings
accounts
or
other
accounts
that
can
be
used
to
help
cover
expenses.
- Home
equity
- Total
amount
of
equity
in
your
home
that
you
are
willing
to
use
toward
your
living
expenses.
Only
include
the
home
equity
that
you
consider
available
to
use
toward
your
living
expenses.
For
example,
the
equity
you
would
make
available
by
selling
your
home
and
moving
into
a
smaller
one.
- Investments
- Total
value
of
all
investments
that
you
are
willing
to
use
toward
your
living
expenses.
- Other
- Any
other
assets
that
you
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