Term Life

How much life insurance do you actually need?

Add the years of income your household would need replaced, the debts you want cleared (including the mortgage), and future costs like education; subtract savings and coverage you already have. For many working parents the result is several hundred thousand dollars to over a million. The calculator below does the arithmetic; a licensed professional can pressure-test the assumptions.

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Estimate your coverage amount

Enter round numbers. This is arithmetic on your inputs, not advice, and does not include Social Security survivor benefits, which can reduce the need.

This estimate uses only the numbers you enter. It is not a quote and does not account for your health, age or carrier availability.

Why “10 times income” is only a starting point

Multipliers ignore whether you have a mortgage, how many years until the children are independent, whether a spouse works, and what you have saved. Two families with the same income can need very different amounts. Use the multiplier to sanity-check the result, not to set it.

The pieces of the calculation

Income replacement: annual take-home your household would need, times the years until the youngest is independent or the spouse would otherwise be secure
Debts: mortgage balance, car loans, credit cards, student loans that are not discharged at death
Future costs: education, a wedding, care for a dependent
Final costs: funeral and last medical bills
Subtract: savings, retirement accounts your survivors could use, existing individual and group coverage, expected Social Security survivor benefits

Matching the term to the need

The term should outlast the longest obligation. If the mortgage has 25 years left and the youngest child is two, 30 years covers both. Some people ladder two policies: a larger 20-year policy for the child-raising years and a smaller 30-year policy for the mortgage tail, which can cost less than one large 30-year policy.

Insuring a stay-at-home parent

A parent without a paycheck still has an economic value: childcare, transportation, household management. Replacing those services can cost tens of thousands of dollars a year. Term coverage on the at-home parent is inexpensive and commonly overlooked.

Common questions

Should I count Social Security survivor benefits?

A surviving spouse caring for children under 16, and the children themselves, may qualify for monthly benefits based on the deceased worker’s record. They can reduce the income-replacement need meaningfully. The Social Security Administration’s survivors page and your statement at ssa.gov show estimates.

Is it better to buy one policy or two?

Two policies with different terms can cost less than one large long policy when part of the need ends earlier. It also lets you drop one later without losing the other. Ask for both quotes.

What happens when my term life insurance ends?

Coverage stops, or renews year to year at a much higher price if the policy has a renewal provision. Some policies let you convert to permanent coverage before a deadline without a new medical review.

Is AskLily an insurance company?

No. AskLily is an education and referral service. Lily, our automated assistant, helps you understand options and, when you ask, connects you with a licensed independent insurance professional. AskLily does not sell, bind or underwrite coverage.

Does it cost anything to talk to Lily or a licensed professional?

No. There is no fee to use AskLily, ask Lily questions, or speak with a licensed professional we refer you to. If you decide to apply for a policy, you pay premiums to the insurance company that issues it.

Talk it through with Lily

Ask what this means for your situation. When you want numbers or an application, Lily connects you with a licensed independent professional.