How Much Life Insurance Do I Need?
Calculate your life insurance needs based on your income, debts, family situation, and state-specific costs like college tuition and cost of living.
Frequently Asked Questions
A common rule of thumb is 10-12 times your annual income, but your actual needs depend on your debts, number of dependents, existing savings, and future obligations like college costs. Our calculator factors in all these elements for a personalized recommendation.
DIME stands for Debt, Income, Mortgage, and Education. It's a formula to calculate life insurance needs: add up all debts, multiply income by years to replace, add mortgage balance, and add education funding needs for children. Then subtract existing resources like savings and current coverage.
Yes. If you live in a high cost-of-living state like California or New York, your family will need more to maintain their lifestyle. Our calculator bases income replacement on your actual income — which already reflects local costs — and applies state-specific figures for college costs and estate taxes. It also shows your state's cost of living index relative to the national average for context.
If your estate may be subject to estate taxes (12 states plus DC have estate taxes, 5 states have inheritance taxes), life insurance can provide funds to pay these taxes without forcing heirs to sell assets. Our calculator includes estate tax estimates for applicable states. Use our Estate & Inheritance Tax Calculator for a detailed tax estimate.
Naming a revocable trust as your beneficiary gives you control over how the payout is distributed. If your intended beneficiary is a minor, a trust can hold and manage the funds for their benefit instead of the court appointing a guardian. A trust also acts as a backstop if your named beneficiary predeceases you and there is no contingent named. The revocable trust SimplyTrust builds online can serve as a primary or contingent beneficiary on any policy.
Employer-provided life insurance (typically 1-2x salary) counts as existing coverage. However, it's usually not portable if you leave your job, so many people also maintain personal coverage. Enter your employer coverage in our calculator to see your coverage gap.
Term life insurance provides coverage for a specific period (10, 20, or 30 years) at lower premiums. Whole life is permanent coverage with a cash value component but costs 5-15x more. For most families focused on income replacement, term insurance offers the best value.
