Term life insurance calculator

Term life cover to consider

Total$1,080,000
Income replacement
$840,000
Total need before offsets
$1,170,000
Assets & cover already in place
$90,000
Suggested term length
12 yrs
Term life cover to consider
$1,080,000

A needs-based estimate, not a quote. Premiums depend on age, health and the insurer's underwriting.

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The short answer

Cover should replace what your household would lose. Add the income to replace, the mortgage, other debts, an education fund and final costs, then subtract savings and any policy you already hold. What remains is the cover to consider.

Why term, and for how long

Term cover buys a large payout for a fixed number of years at a low premium, because it does not include an investment component. The sensible term is the number of years your household would still depend on your income — typically until the mortgage is clear and the children are independent.

Checks before you buy

  • Count cover provided by an employer as temporary: it usually ends when the job does.

  • Insure a non-earning parent too — replacing their work has a real cost.

  • Answer health questions accurately; a misstatement can void a claim.

  • Review the amount after a move, a new child or a large change in debt.

The formula

Cover = (income x years of support) + mortgage + other debt + education + final costs - savings - existing cover.

FAQ

First time home buyer steps from budget to closing

Before viewing homes, review income, debt, savings, credit, and the full monthly cost of ownership. A mortgage payment is only one component; property taxes, homeowners insurance, mortgage insurance, HOA dues, utilities, maintenance, and repairs may also apply. A debt to income ratio calculator provides a planning estimate, but a lender’s underwriting rules determine how debts and income are treated for a loan application.

Mortgage preapproval can help define a conditional financing range, but it is not final approval or a requirement to spend the full amount. Compare loan estimates from lenders, including the interest rate, annual percentage rate, points, lender fees, cash to close, and projected payment. An offer may involve earnest money, inspection terms, financing conditions, appraisal issues, and title review. Escrow and title insurance serve different purposes and should be reviewed separately.

Common questions

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