Term Life Insurance Cover Calculator

Work out term life insurance cover instantly with clear inputs, formula shown and shareable results.

About Term Life Insurance Cover Calculator

The income-multiple rule of thumb — commonly 10 to 15 times annual income — covers ongoing living costs, and specific liabilities and goals are then added on top. Term insurance is the efficient vehicle for this because it buys the largest sum assured per unit of premium.

Formula

Recommended cover

Cover = Annual income x Multiple + Outstanding loans + Goal fund

Worked example

With the default values below, Term Life Insurance Cover Calculator returns Recommended term cover of $27,000,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual income: 1,500,000
Income multiple to cover: 12
Outstanding loans: 5,000,000
Children's education and goal fund: 4,000,000

Results

Recommended term cover: $27,000,000.00
Income replacement element: $18,000,000.00
Loans and goal funding element: $9,000,000.00
Total cover as a multiple of income: 18.0

Step by step

1Values used
2Recommended cover
3Recommended term cover= 27,000,000.00
4Income replacement element= 18,000,000.00
5Loans and goal funding element= 9,000,000.00
6Total cover as a multiple of income= 18.0

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, tax or fees or charges 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

Why 10-15 times income?

It approximates the lump sum that, conservatively invested, can replace the income for the remaining dependency period after allowing for inflation.

Should the term run to retirement?

Usually yes, or until dependants are financially independent and liabilities are cleared, whichever is later.