Life Insurance Needs Calculator

A. Dependents' annual expenses (housing, taxes, automobile, savings, clothing, giving, insurance, recreation, etc.)
B. Dependents' annual income (salary, investments, Social Security, pensions, etc.)
C. Additional annual income needed by your dependents
(A minus B calculated for you)
D. Annual interest rate you assume your dependents can earn on investments    %
E. Estimated life insurance coverage needed
(C divided by D calculated for you)

*This worksheet is a very simplified form only giving rough estimates. For instance, it only uses interest earned on the life insurance benefit paid to dependents as annual income for them. Their principal remains intact. Also, the worksheet includes no assumptions for annual inflation. More elaborate worksheets are available from various sources such as Fidelity Investments which will aid you with more detailed calculations.