Term Life Insurance Calculator

This calculator provides multiple established approaches to estimate a recommended term life insurance face amount, helping you compare results and choose a coverage target. Use the method that best matches your situation: income replacement, needs-based (debts and final expenses), multiple-of-income heuristic, or human-life-value (present value of future earnings).

Results are sensitive to the inputs you provide. Enter realistic assumptions for inflation, expected investment return, and existing assets. The tool gives point estimates and does not include underwriting, policy features, or tax treatment; obtain quotes and policy details from licensed insurers.

Updated Nov 27, 2025

Calculation method

Estimates the lump-sum required now to replace household income for a chosen number of years, accounting for inflation and expected real investment return.

Inputs

Annual gross household income

Min 0

Years to replace income (term length / years of need)

Min 1 · Max 50

Expected annual inflation rate (%)

Min 0 · Max 15

Expected annual real return on invested proceeds (%)

Min -5 · Max 20

Liquid savings available to survivors

Min 0

Outstanding mortgage balance

Min 0

Other debts (auto loans, credit cards)

Min 0

Estimated final expenses (funeral, medical)

Min 0

Planned education funding for dependents

Min 0

Annual survivor income from other sources (e.g., Social Security, pension)

Min 0

Income multipleYears until expected retirement (for human life value)

Min 1 · Max 50

Results

Updates as you type

Recommended coverage (Income replacement)

$1,112,853.68

Output	Value	Unit
Recommended coverage (Income replacement)	$1,112,853.68	USD

Primary result$1,112,853.68

Visualization

Points

Methodology

Income replacement uses a present-value annuity approach to estimate the lump sum required today to replace lost household income for a selected number of years, discounting at an expected real return and adjusting for inflation.

Needs-based sums one-time liabilities and planned expenses (mortgage payoff, debts, education, final expenses) then subtracts available liquid resources and expected survivor income to produce a net needs figure.

Multiple-of-income is a simple heuristic used by many advisors as a quick check. Human-life-value estimates the present value of projected future earnings until retirement.

Model validation, input handling, and data security guidance align with accepted standards for financial modelling and systems: follow NIST guidance for secure handling and testing of inputs, apply ISO risk-management principles when documenting assumptions, and use IEEE recommendations for numerical precision and unit clarity. This tool is a planning aid and not a regulated insurance recommendation.

Worked examples

Example 1 (income replacement): Household with $75,000 income, 20 years of need, 2.5% inflation, 3% real return produces a present-value recommendation that reflects replacement of purchasing power over the chosen term.

Example 2 (needs-based): If final expenses are $15,000, mortgage $120,000, other debts $5,000, savings $20,000, survivor benefits $5,000/year, and 15 years of need, the needs-based calculation subtracts the savings and survivor benefit stream from total obligations.

Expert Q&A

How accurate are these estimates?

These are planning estimates. Accuracy depends on the realism of your inputs and stability of future returns and inflation. The income-replacement and human-life-value formulas assume constant annual amounts and constant rates; small changes in rates or years produce meaningful differences in recommended coverage. Always treat outputs as starting points and obtain live insurer quotes.

Which method should I use?

Use needs-based for priority coverage of debts and final costs, income-replacement if the objective is to replace household spending capacity, and multiple-of-income as a quick sanity check. Human-life-value is often used for single-earner valuation. Comparing methods provides a range to guide decisions.

Does this tool estimate premiums or underwriting?

No. This calculator provides recommended face amounts only. Premiums depend on age, health, policy term, smoker status, and insurer underwriting. After selecting a target face amount, obtain policy quotes from licensed insurers.

How is my data handled and how reliable is the software?

This tool assumes best-practice controls for input validation and numerical stability. For production use, follow NIST SP 800-series guidance for input validation and data handling and IEEE recommendations for numerical precision. Do not submit sensitive personal data into public tools.

Sources & citations

NIST - Risk Management and Privacy Frameworks — https://www.nist.gov
ISO Standards and Guidance (general information) — https://www.iso.org/standards.html
IEEE Xplore - Standards and numerical methods — https://ieeexplore.ieee.org
OSHA - Safety and procedural standards — https://www.osha.gov
National Association of Insurance Commissioners (NAIC) - Consumer information — https://content.naic.org