Life Insurance Needs Calculator
Skip the “10 times income” guesswork. Build your number the way an advisor would — from the income, debts and goals your family would actually need to protect.
The short answer
Your life insurance need is the capital to replace lost income for as long as your family needs it, plus enough to clear your mortgage and debts, fund your children’s education, and cover final expenses — minus the coverage and savings you already have. In Canada the payout is tax-free, so there’s no need to inflate the number for tax.
Ready to see real pricing? A term life quote takes about a minute — no obligation.
How this calculator is different
- Income replacement by present value. It calculates the lump sum that actually funds your family’s income gap for the years they need it — not income × a flat multiple.
- Deplete vs preserve capital. Choose whether the payout is spent down or kept intact, because that changes the number a lot.
- It nets out what you have. Existing coverage, savings and survivor benefits are subtracted, so you see the real gap.
- Built for Canada. No tax gross-up (the benefit is tax-free), plus room for children’s education and a reality check against the 10× rule.
The math behind it (for the curious)
Income replacement uses the present value of your annual income gap
(income × % needed) over your chosen number of years, discounted at a real
(after-inflation) return: gap × [1 − (1 + r)⁻ⁿ] ÷ r when you spend the capital
down, or gap ÷ r when you preserve it. To that we add your mortgage, other
debts, children’s education and final expenses, then subtract existing coverage, liquid
assets and any survivor benefits.
These are simplified estimates. They don’t model your full tax picture, inflation on specific goals, or the exact terms of government and employer survivor benefits — a licensed advisor can refine them for your family.
Life Insurance — Frequently Asked Questions
Enough to replace the income your family would lose, pay off debts including your mortgage, fund your children’s education, and cover final expenses — minus what you already have in coverage and liquid assets. That total is your needs-based number. Rules of thumb like “10 times income” are a rough starting point but often miss the mark for your actual situation.
A flat multiple ignores your mortgage size, how many years of income your family needs, your children’s ages, and the coverage and savings you already have. Two families with the same income can have very different real needs. This calculator builds the number from your actual obligations instead.
No. A life insurance death benefit paid to a named beneficiary is received tax-free in Canada, and it bypasses the estate and probate. That is why this calculator does not add a tax gross-up to the amount needed.
Deplete means the payout, while invested, is gradually spent down to zero over the income-replacement years — this needs less coverage and suits most families. Preserve means the family lives off the investment returns and keeps the capital intact (for example, to leave an inheritance) — this needs more coverage.
Most families cover a temporary need — a mortgage, young children, working years — for which term insurance is usually the most affordable fit. Permanent insurance suits lifelong needs or estate planning. A licensed advisor can match the type and term to your needs and budget.
Understand the coverage behind the number
Our guides explain how much coverage different families need and how life insurance compares with critical illness protection.
The information on this website is for educational purposes only and does not constitute financial, legal, tax, investment, insurance, or mortgage advice. Personalized recommendations must be provided by a qualified licensed professional based on your individual circumstances. Secure Future Financial connects visitors with licensed advisors and does not sell financial products directly. Calculator results are illustrative estimates based on the figures you enter and simplified assumptions; they are not a recommendation of a specific coverage amount or product.