What is the Life Insurance Calculator?
Life insurance protects the people who depend on your income. The question is not really whether you want cover but what would happen financially to your household if your income stopped permanently — and whether their savings could absorb that.
This calculator estimates a cover amount from the income needing replacement and the debts that would remain. It is a starting figure to refine, not a final answer.
What each input means
- Annual income
- The income the household would lose.
- Income replacement years
- How long dependants would need that income replaced.
- Outstanding liabilities
- Debts that would otherwise pass to the family.
How this calculation works
Income to be replaced is multiplied by the number of years it is needed, then liabilities are added. The result is an indicative cover requirement — enough to settle debts and sustain the household through a period of adjustment.
Refining it means subtracting existing savings and cover already held, and adding known future costs such as education. Inflation matters here too: a fixed sum supports progressively less spending over a long replacement period.
Formula: Result = the relevant inputs combined using the displayed assumptions.
Getting the most out of the result
- Recalculate after major life changes — a child, a mortgage, a significant income change or a divorce all move the requirement.
- Insure the person whose income the household depends on, and consider cover for a non-earning partner whose unpaid work would otherwise need paying for.
- Keep nominations current. An out-of-date beneficiary designation causes real difficulty at the worst possible time.
- Compare the cost of separate protection and investment against a combined product before assuming the bundle is convenient.
- Tell your family the policy exists and where the documents are. Unclaimed policies are more common than people imagine.
Common mistakes to avoid
Households routinely insure only the primary earner while ignoring that replacing a non-earning partner's contribution — childcare, household management — carries real cost. Cover is also frequently bought once and never revisited, so it bears no relation to circumstances a decade later. Nominations go stale. And many buy policies combining insurance with investment without recognising that they typically pay more for less cover and receive modest returns on the investment portion.
Frequently asked questions
Who actually needs life insurance?
Anyone whose death would create financial hardship for others — dependants, a partner reliant on shared income, or a co-signer on a debt. Someone with no dependants and no shared obligations generally has little need for it.
How much cover is appropriate?
Enough to clear debts and replace income for as long as dependants need it, minus existing savings and cover. The calculation above provides a starting estimate to adjust for your specific situation.
What is the difference between term and whole life cover?
Term covers a defined period and pays only if death occurs within it, which makes it inexpensive. Whole life covers your entire life and usually accumulates a cash value, at a substantially higher premium for the same cover.
Should insurance be combined with investment?
Usually not. Combined products tend to deliver less cover per unit of premium and modest investment returns compared with buying term insurance and investing the difference separately. The bundle buys convenience at a real cost.
Does a non-earning partner need cover?
Often yes. Their contribution has genuine economic value, and replacing childcare and household management costs money. The requirement is smaller than for a primary earner but rarely zero.
What if my health changes after I buy?
An in-force policy generally cannot be repriced or cancelled because your health deteriorates, provided you disclosed truthfully at purchase and keep paying premiums. This is a strong argument for buying while healthy.
How do I make sure a claim is paid?
Disclose everything accurately at application, keep premiums current, keep nominations updated, and ensure your family knows the policy exists and where to find the documents.