Life Insurance Calculator: How Much Life Do I Need?

by COUNTRY Financial

Life insurance helps shield your family from financial burden if you pass away. Its payout is called a death benefit, which can help your surviving beneficiaries pay for things like living expenses, outstanding debt, funeral expenses and more.

Because everyone's financial situation is unique, there's no set formula for life insurance coverage. But if you're in the market for a policy, this page is the right place to start to calculate your life insurance needs.

Calculating life insurance

As you're calculating life insurance on this page, remember that recommended life insurance coverage should equal 10 times your annual income. The goal is to provide a death benefit that covers the entirety of your current financial situation; be sure to consider things like your income, debt, mortgages and other assets, and the number and ages of your children.

Why do I need life insurance?

Here are a few areas a life insurance death benefit can help your beneficiaries:

• Burial and funeral expenses: Life insurance can help alleviate the cost of your funeral on your loved ones, which could otherwise be a major financial burden.
• Income replacement: A death benefit can cover essential expenses for your beneficiaries, like living costs, education and daily needs.
• Mortgage(s): Say you've mortgaged a home that you want to remain in your family, but you're not sure your family could afford it upon your death; life insurance can help them pay for it.
• Outstanding debt: Outstanding debts could be passed to your beneficiaries upon your death. A sufficient life insurance death benefit can help cover owed money you leave behind.

To learn more about how life insurance can help your family, read our article on reasons to consider buying it.

Types of life insurance policies

COUNTRY Financial offers three options for life insurance: Term Life, Whole Life, and Indexed Universal Life. Here's how each works:

• Term Life: Provides coverage for a specific time—usually from 10-30 years—and pays a death benefit to beneficiaries if the policyholder dies during that time.
• Permanent Life: Provides lifetime coverage and can include flexible premiums. It also includes a "cash value" component, where part of the monthly premiums go into an account that grows over time.
  
  The following are types of Permanent Life Insurance:
  • Whole Life: Whole Life has fixed instead of flexible premiums but retains the "cash value" component.
  • Indexed Universal Life (IUL): This insurance offers premium coverage and flexible premiums. It's also based on a chosen market index and can grow cash value over time.

To learn more about the different types of life insurance visit: Term vs Whole Life Insurance - COUNTRY Financial.

Final thoughts

Life insurance is a complex and nuanced topic, and no one can tell you for certain whether you need it. It all depends on your situation.

If you’d like to know more about life insurance coverage or policies, talk to your insurance agent today—they can help you determine how much coverage you need and answer any questions.

Updated 2-20-25