Insurance Sum Assured Requirement Calculator

Work out insurance sum assured requirement instantly with clear inputs, formula shown and shareable results.

About Insurance Sum Assured Requirement Calculator

The needs-analysis approach sizes life cover from what the family would actually require: annual expenses multiplied by the years of support needed, plus debts that must be cleared, less assets and cover already in place. It gives a defensible figure rather than an arbitrary income multiple.

Formulas

Total need

Need = Annual expenses x Years of support + Outstanding liabilities

Cover gap

Sum assured required = max(0, Need - Existing savings and cover)

Worked example

With the default values below, Insurance Sum Assured Requirement Calculator returns Additional sum assured required of $19,500,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual household expenses to replace: 900,000
Years of support required: 20
Outstanding loans and liabilities: 4,500,000
Existing savings and life cover: 3,000,000

Results

Additional sum assured required: $19,500,000.00
Total financial need: $22,500,000.00
Income replacement component: $18,000,000.00
Existing savings and cover: $3,000,000.00

Step by step

1Values used
2Total need
3Cover gap
4Additional sum assured required= 19,500,000.00
5Total financial need= 22,500,000.00
6Income replacement component= 18,000,000.00
7Existing savings and cover= 3,000,000.00

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

Frequently Asked Questions

Should I allow for inflation?

Ideally yes — either uprate the expense figure or lengthen the support period. A real-return assumption on the invested lump sum is the more precise approach.

Why deduct existing savings?

Because they would be available to the family. Ignoring them leads to buying and paying for cover you do not need.