![]() To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site. The Forbes Advisor editorial team is independent and objective. Life insurance rates vary from company to company, so comparing quotes online or working with an independent life insurance agent can help you find the best life insurance rates for your age and health. Compare life insurance quotes from multiple companies to see which ones offer you the best price. Once you know your life insurance needs, you can start shopping for a policy. The DIME (Debt and final expenses Income Mortgage Education) method includes more life insurance factors than simply multiplying your income and provides a rough estimate, but it doesn’t take into account savings and child care costs. But this also falls short of being a reliable method for calculating how much life insurance you need. If you have children with future college needs, you could multiply your income by 10 and tack on $100,000 to pay for college. Option 3: 10 times income plus $100,000 for college.Simply multiplying your annual income by a rather random number doesn’t account for your individual situation and anticipated needs and existing assets. Option 2: Multiply your annual income by more than 10.This is the easiest way to to get an estimate, but this method could leave you underinsured because it doesn’t take into account factors like debts, a mortgage and future education needs of children. Option 1: Multiply your annual income by 10.How to Manually Calculate How Much Life Insurance You Needīesides using the life insurance needs calculator, there are other ways to estimate how much life insurance you need. For example, you can customize a policy with a long-term care rider, waiver of premium rider or accelerated death benefit rider. 3: Consider other life insurance benefits you might want to consider a life insurance rider, which is an optional add-on to a policy for additional coverage. 2: Take into account other life insurance policies, like life insurance from your employer. 1: Figure out the type of life insurance you need, such as term life insurance or permanent life insurance. Keep these tips in mind when deciding your life insurance needs: Tips for Calculating How Much Life Insurance You Need When you use our life insurance calculator, a results page will provide an estimate of your life insurance needs along with details of what you entered. Now we want to subtract the assets your family would use if you passed away, like funds in a savings account, a retirement plan or another life insurance policy. Enter your savings and any current life insurance coverage.To do this, determine how much you owe or anticipate owing for the following financial obligations, such as mortgage, credit card debt, loans, future educational cost and funeral expenses. Enter your debts and future costs you want to cover.We multiply your annual income by the number of years your loved ones will need that salary. Enter your annual income and how many years of income you want to cover. ![]() To find out how much life insurance you may need, follow the steps below and our life insurance calculator will do the rest. Recalculate How to Use Our Life Insurance CalculatorĪ good estimate of life insurance needs requires using a formula that includes your future financial obligations and your assets, such as savings, that your loved ones can use if you die.
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