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Life Insurance Needs Worksheet

Get a general sense of how much life insurance you need to protect your family. Before buying life insurance, it makes sense to consult with an insurance professional for a more thorough analysis of your needs. This worksheet assumes you died today.

Total annual income your family would need if you died today

What your family needs, before taxes, to maintain its current standard of living

(Typically between 60% - 75% of total income)

Annual income your gamily would receive from other sources. For example, spouse’s earnings or a fixed pension.

(Do not include income earned on your assets, as it is addressed later in the calculation)

Income to be replaced

Subtract line 2 from line 1

Capital needed for income

Multiple line 3 by appropriate factor in Table A.


Funeral And other final expenses

Typically the greater of $15,000 or 4% of your estate

Mortgage and other outstanding debts

Include mortgage balance, credit card balance, car loans, etc.

Capital needed for college

(2013 - 2014 average 4-year cost: Private $163,668; Public $73,564)

Total capital required

Add items 4, 5, 6 and 7


Savings and investments: Bank Accounts, money market accounts, CSs, stocks, bonds, mutual funds, annuitites. etc.

Retirement savings: IRAs, 401(k)s, SEP plans, SIMPLE IRA plans, Keoghs, pension and profit sharing plans

Present amount of life insurance

Including group insurance as well as insurance purchased on your own

Total income producing assets

Add lines 9, 10 and 11

Life insurance needed

Subtract line 12 from line 8


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