Term Life Insurance Coverage Calculator
Estimate the coverage you need to protect your family's financial future.
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Suggested Coverage Amount:
Estimated Monthly Premium:
*Estimation based on standard industry risk factors. Actual quotes will vary by provider.
Understanding Your Term Life Insurance Needs
Choosing the right amount of life insurance is one of the most critical financial decisions you will make. Term life insurance provides coverage for a specific period (the "term"), usually ranging from 10 to 30 years. If the policyholder passes away during this term, the beneficiaries receive a tax-free death benefit.
How Is Coverage Calculated?
Our calculator uses the DIME method (Debts, Income, Mortgage, Education) to provide a comprehensive estimate. The formula follows this logic:
- Income Replacement: Most experts recommend replacing 7 to 10 times your annual salary to maintain your family's lifestyle.
- Debt Clearance: Your coverage should be enough to pay off your mortgage, car loans, and credit cards immediately.
- Future Obligations: Include the cost of university tuition for children and final funeral expenses.
- Asset Deduction: We subtract your current liquid savings and existing life insurance policies to ensure you aren't over-insured.
What Influences the Premium?
While the coverage amount is the primary driver of cost, insurance companies also look at:
- Age: Younger applicants represent lower risk and thus pay lower premiums.
- Health Status: Smoking significantly increases premiums, sometimes by 200-300%.
- Term Length: A 30-year term will have a higher monthly cost than a 10-year term because the probability of a payout is higher over a longer window.
Example Calculation
Imagine a 35-year-old earning $75,000 annually who wants to provide 10 years of income. They have a $200,000 mortgage and $50,000 in savings.
(75,000 * 10) + 200,000 – 50,000 + 15,000 (Funeral) = $915,000 in required coverage.