How Much Permanent Life Insurance Do I Need?
Term insurance covers the needs that end. This works out the ones that do not — which is the only honest reason to pay several times as much per dollar for permanent coverage.
Whole life and indexed universal life cost several times what term costs for the same death benefit. That difference is not a markup: it is what a guarantee that never expires has to be funded to deliver. Which means the only sound way to size permanent coverage is to work out the part of your need that genuinely never ends, and buy term for the rest.
Most people have both. A mortgage ends. A funeral does not. Twenty years of income replacement ends when the children are grown; a disabled adult child's support does not. Sizing the permanent piece separately is what stops you either overpaying for permanence you do not need or discovering at eighty that the policy expired.
Anything this calculator leaves out is a temporary need, and belongs on the term life page instead.
The part that never ends
Only include obligations that would still exist in thirty years. If it has an end date, leave it out and price it as term.
Prefer to work it out yourself?
The calculator above needs JavaScript. The arithmetic is not complicated — here it is, so you can do it on paper and skip us entirely if you want to.
- List only the obligations that would still exist in thirty years.
- Add final expenses, and any cash the estate would need so nothing has to be sold quickly.
- Add lifelong support for anyone who will always depend on you.
- Add any business obligation that outlives you, and any amount you want to leave on purpose.
- Subtract permanent coverage you already hold. Do NOT subtract term insurance: it expires before the need does.
- Subtract assets your family would genuinely use for this.
- What is left is the permanent gap. Everything you left out is a temporary need, and term buys far more of it per dollar.
Questions about this number
Why can I not just subtract my term policy?
Because it will not be there. Term insurance covers a stated number of years and then stops, and permanent needs by definition outlast it. Subtracting a twenty-year term policy from a need that arrives at eighty-five is the single most common way people end up underinsured at exactly the wrong moment. If the term policy is convertible, that is genuinely relevant — but it is a plan, not a subtraction.
Is whole life or indexed universal life better for this?
They answer the same need differently. Whole life guarantees the death benefit, the premium and a cash value schedule, and you pay for those guarantees. Indexed universal life offers flexibility and index-linked crediting, guarantees far less, and puts more of the responsibility on you to keep it funded. Neither is better in the abstract; the question is how much certainty you want to buy.
Should the number include my whole net worth?
No, and doing so is how people talk themselves out of coverage they need. Subtract only what your family would genuinely liquidate for this purpose. A house they live in, a retirement account someone is depending on, or a business that is somebody's livelihood are not available in practice, whatever the balance sheet says.
What if the permanent number comes out at zero?
Then you do not need permanent insurance, and anyone insisting otherwise should explain which specific obligation they think never ends. That is a perfectly normal result for someone with no dependents, a modest estate and money set aside for a funeral. Term for the temporary need and nothing else is a complete answer.
Send this to a licensed agent
Your figure goes with it. A licensed agent calls back, usually the same business day, and will tell you plainly if term would serve you better for most of it.
Read next
Whole Life Insurance · Indexed Universal Life · How much life insurance do I need? for the temporary part.