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Home | Frequently Asked Questions | Life Insurance Needs Calculator

Life Insurance Needs Calculator

How much life insurance is enough?

The Consumer Federation of America (CFA, 1997) recommends 6 to 8 times your income for a married couple with children. While rules of thumb may be helpful, they do not take each individual's situation into consideration. This calculator provides a quick and simple method to estimate the amount of life insurance you may need.
Income Needs
Annual income your family would need if you die today
Enter a number that's typically 60% - 70% of total income. Include all salaries, dividends, interest, and any other sources of income. 		$
Annual income available to your family from other sources
Enter a number that includes dividends, interest, spouse's earnings (Social Security may be available). 		$
Years income will need to be replaced1  
 
Expenses
Burial expenses
The average cost of an adult funeral is about $10,000. 		$
Mortgage and other debts
Include mortgage balance, credit card debt, car loans, home equity loans, etc. 		$
Miscellaneous expenses
Include gifts to family members or organizations, estate taxes, etc. 		$
College costs2
2004-2005 cost of a four-year education: public college-$45,416; private college-$110,064.
Number of children:

 
Assets
Savings and investments
Bank accounts, CD's, stocks, bonds, mutual funds, real estate/rental property, etc. 		$
Retirement savings
IRA's, 401(k) plans, Keoghs, pension and profit sharing plans. 		$
Present amount of life insurance
Include group insurance and personal insurance purchased on your own. 		$
 
   
 
1Important note: Inflation is assumed to be 4%. The rate of return on investments is assumed to be 8%.
2Source: The College Board, Trends in College Pricing 2004.
 
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Insurance eligibility and premiums are subject to underwriting.
Issued by The American Life Insurance Company of New York.