Detailed Calculation of Life Insurance Needs
Our comprehensive calculator will provide a very detailed analysis to answer your question how much life insurance you need.
The comprehensive input area allows looking into all details that are considered a factor when you determine the amount of your life insurance in order to provide an exhaustive report and help you estimate accurately your insurance needs.
Explanation of the fields that need to be filled in:
If you need a detailed guide on what should be taken into account to determine life insurance needs, read How much life insurance do I need?.
- Existing life insurance coverage
The amount of your existing life insurance coverage if you already have such.
- Required estate preservation
The estate you want to preserve for your heirs/surviving beneficiaries.
- Expected inflation rate
The expected inflation rate will reflect on the rate with which you expect your income and expenses to rise. The current average of the inflation rate is 3%.
- After tax return on investments
Fill in the annual compounded rate of return (after tax) that you expect from your investments.
Your should be aware that such a prediction is not possible with certainty since this rate depends on a number of factors, such as the types of investments you make, fees that are charged by companies, etc. Remember that for riskier investments at times this rate can be even negative and loss of the principal on your investment can also occur.
- Value of investments:
Fill in the total balance of your registered retirement accounts (RRSPs, RRIFs, annuities, Employer Pension Plans, and other).
Fill in the total of your bonds (Treasury, municipal, or commercial).
Fill in the total of any individual stocks you own (except for those in your registered retirement accounts).
Fill in the total of any mutual funds you have invested in (again, except for the mutual funds that are in your registered retirement accounts)
Fill in the total of the Guaranteed Investment Certificates you own.
Fill in the total balance of any checking and savings accounts you own.
Fill in the total of any other cash or liquid assets you have.
Fill in the total of any other investment assets of value you may have.
- Registered retirement accounts
- Value of non-income assets:
Fill in the current market value of your home (try to provide as accurate current number as possible; don't just enter the price you have bought your home for).
If you have a country/summer house, enter its market value here (again, try to provide an accurate current number).
Fill in the current market value of any other real estate you own (e.g. a second home, rental property, undeveloped land, etc.)
Fill in the total value of all cars you own (not the leased ones).
If you own other vehicles, like campers or RVs, fill in their total value here.
Fill in the current market value of any jewelry, gems or precious metals (e.g. gold) that you may own.
Other valuable assets you own (this may be silverware, furniture, home electronics, etc.).
- Current liabilities:
Fill in the remaining principle balance on your home mortgage (what you have to pay to own your clear of mortgage debt).
Fill in the remaining principal balance for the mortgages of any other real estate you may have.
The outstanding balance on your auto loans.
Fill in the amount you owe (if any) in student loans.
Fill in your total credit card debt.
loans/Line of credit
Fill in the total amount you owe for lines of credit.
Fill in the total amount you owe for other (not listed above) loans.
- Home mortgage
- Expenses at death:
The costs that will be needed to cover the funeral.
The legal fees and costs that will be incurred for disbursing your assets when you are deceased (they may be significant even if you have a will).
Any taxes that will be required to be paid upon your death.
All medical costs that your medical insurance will not cover.
Total amount you want to leave for charity
Any other expenses that may be needed to be paid upon your death.
- Funeral costs
- Children's education fund
If you want to provide for your children's education, fill in the desired amounts in this section for each child, along with your current child's age and the age at which you want the education funds to be used.
In the tuition field fill in the estimated cost for one year of tuition and books (this amount is specific to the school the child will be attending).
This calculator assumes that all expenses are due at the end of the year.
- Value of future income
This section is for input of any future income that your family (beneficiaries) may have.
- Amount required for living expenses
This section includes fields for all kings of living expenses that your family (beneficiaries) may have and that you would want your life insurance proceeds to provide for. This includes expenses for housing, insurance, child care, taxes, utilities, and other miscellaneous items.