Insurance Needs Calculator
Your household
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States — state-regulated insurance
- Scope and limitations
- Educational estimate only. Insurance in the U.S. is regulated state by state, so rates, required coverages and available discounts differ by where you live. Your premium is set by an insurer's own underwriting — driving record, claims history, credit-based insurance score where permitted, the property itself — and only a quote is binding. What a policy pays depends on its exclusions and limits, not on this estimate.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your annual household income and your net worth.
- 02
Enter the life insurance you already carry, including coverage through work.
- 03
Enter the monthly disability benefit you already have — check the group plan documents rather than guessing, and note any cap.
- 04
Enter the liability limits on your home and auto policies today.
- 05
Read the three gaps. Start with the line that would hurt most if it happened tomorrow, not the one that is cheapest to close.
Formula
Three benchmarks, each compared with what you already carry. Life: annual income x the years of income to replace, less the life insurance you hold. Disability: monthly income x the replacement percentage, less the monthly benefit you hold. Liability: net worth rounded up to the next million — the smallest umbrella policies are written in millions — less the liability limits on your home and auto policies. Each line reports a gap only when the benchmark exceeds what you carry; a line where you are covered says so. These are the standard starting points, not underwriting, and the three linked tools do the detailed work for each line.
Example
A household earning $80,000 a year with $600,000 of net worth, no life or disability coverage of its own, and $300,000 of liability limits on the home and auto policies. Life — the benchmark is ten years of income: $80,000 x 10 = $800,000. Coverage held: $0. Gap: $800,000. Disability — the benchmark is 60% of monthly income: ($80,000 / 12) x 60% = $4,000 a month. Coverage held: $0. Gap: $4,000 a month. Liability — net worth of $600,000 rounds up to the $1,000,000 minimum umbrella. Limits held: $300,000. Gap: $700,000. Three lines, three gaps. Now the order to fix them, which the raw numbers do not tell you. Liability is first because $700,000 of additional cover costs roughly $150 to $300 a year. Disability is second because it is the likeliest of the three to happen while you are working. Life is last here not because it matters least, but because $800,000 of 20-year term for a healthy 35-year-old is about $30 a month — the largest number on the page is not the largest bill.
Definitions
- Coverage gap
- The difference between what a benchmark says you need and what you actually carry. This tool reports one per line.
- Rule of thumb
- A standard starting point — ten years of income for life, 60% for disability, net worth for liability. A place to begin, not an answer.
- Income replacement
- Annual income times the years a household would need it. The basis of the life figure here.
- Replacement percentage
- The share of pay a disability policy would provide. Sixty percent is the usual ceiling insurers will write.
- Liability limit
- The most your home or auto policy pays for what you owe someone else. An umbrella extends it.
- Net worth
- Everything you own less everything you owe — the benchmark liability coverage is measured against.
- Group coverage
- Insurance through an employer. Cheap or free, capped, and it ends when the job does.
- Underinsured
- Carrying coverage, but not enough to absorb the loss it exists for. More common than carrying none.
- Self-insuring
- Deliberately carrying a risk yourself because you could absorb it. Sound for small losses, dangerous for large ones.
- Term life
- Fixed-length life coverage with no cash value. What makes a large death benefit affordable.
- Umbrella policy
- Liability coverage above your home and auto limits. The cheapest coverage per dollar protected in this check.
- Elimination period
- The wait before disability benefits begin — commonly 90 days, funded from your own savings.
Good to know
Why these three lines and not the others
This check covers life, disability and liability, and leaves health, home and auto to the other tools in this category. The split is not arbitrary. For these three, the right amount of coverage depends on your income and net worth — how much you earn, how long people would need it, how much a court could reach. Nobody can tell you the right death benefit without knowing what your household lives on. For health, home and auto, the amount is set by the thing being insured: the plan's deductible, the cost of rebuilding the house, the value of the car. Those are priced from the policy in front of you, not from a benchmark against your income, which is why they are separate calculators rather than lines in this one.
The order to fix gaps, which is not the order people buy
Most households buy life insurance first, liability last, and disability never. The evidence suggests close to the reverse. Disability is the likeliest of the three to happen during working years — roughly one in four working-age adults, against a much smaller chance of dying before retirement — and it is the one that stops income while leaving expenses. Liability is the cheapest per dollar protected: an extra million of umbrella coverage runs $150 to $300 a year, less than most people pay for a phone. Life is genuinely important and it is also the one most households already have some of, through work. If you can only close one gap this year, close the one whose absence would be unrecoverable, not the one that is easiest to shop for.
Reading a gap as a policy size, not a bill
The life gap is usually the largest number on the page and it frightens people out of acting. It should not. A gap of $800,000 is a coverage amount, and coverage amounts and premiums are only loosely related — that is the whole point of term insurance. For a healthy 35-year-old, $800,000 of 20-year level term runs roughly $30 a month. The liability gap behaves the same way: $700,000 of additional cover is a rounding error on an umbrella premium. Only the disability gap translates into a monthly figure that resembles its own cost, because disability premiums genuinely run 1% to 3% of income. So read each gap as the size of the thing to go and price, then price it, before deciding what you can afford.
What the benchmarks assume, and when they are wrong
Ten years of income, 60% replacement and liability at net worth are standard starting points, and each is wrong for somebody. Ten years underestimates a household with a newborn and a thirty-year mortgage, and overestimates one whose youngest child graduates next year. Sixty percent is the insurer's ceiling rather than a target — if the benefit would be tax-free because you paid the premium yourself, it lands closer to your take-home than the percentage suggests. Liability at net worth understates the exposure of a young high earner whose real asset is thirty years of future wages, which is why the deep-dive tool adds them. Use the Advanced options to move the years and the percentage to match your own household, and treat the result as a place to start a conversation rather than the end of one.
What this check leaves out
Three things are missing on purpose. Long-term care insurance is a real gap for many households, but the decision turns on age, health and family history far more than on income, and it is usually a conversation from the mid-fifties onward. An emergency fund is not insurance but sits underneath all of it: savings handle the losses too small to claim, insurance handles the ones too big to absorb, and a household with neither should generally build the first before buying more of the second. And nothing here knows your state. Insurance is regulated state by state in the U.S., asset protection law varies enormously, and what a carrier will write for you depends on your health and your history. This finds the gaps; it does not fill them.
Frequently asked questions
Why only these three lines?
Because life, disability and liability are the three where the right amount depends on your income and net worth rather than on the thing being insured. Health, home and auto coverage is set by the policy you buy and the property you own, so those are priced separately by the other tools in this category.
Which gap should I close first?
Usually disability, then liability, then life — which is the reverse of how most households buy. Disability is the likeliest of the three during working years, liability is the cheapest to fix per dollar of protection, and life is the most expensive but also the most widely bought already.
The life gap looks enormous. Is that right?
It is a coverage amount, not a cost. Ten years of an $80,000 income is $800,000 of death benefit, and for a healthy 35-year-old that is roughly $30 a month in 20-year term. Read the figure as a policy size, then price it.
Are these rules of thumb or real analysis?
Rules of thumb, and the page says so. Ten years of income, 60% replacement and liability at net worth are the standard starting points. The three deep-dive tools linked from this page each do the real analysis for one line.
Does employer coverage count?
Enter it, because it is real while you have it. But it ends with the job, group life is usually only one or two times salary, and group disability caps the monthly benefit. Treat it as a layer, not a foundation.
What if I have no dependents?
The life line probably does not apply, and you can set the years of income to replace to a small number or ignore that row. Disability and liability still do — losing your own income hurts you whether or not anyone else depends on it.
Why is liability measured against net worth?
Because a judgment reaches what you own, and in most states what you will earn. Insurance is what stands between a single bad afternoon and everything you have built, and it is priced as if such afternoons were rare — which they are.
Is there such a thing as too much coverage?
Yes. Premiums are money that could pay down debt or fund retirement. The point of a checkup is to find the lines where a gap would be catastrophic, not to maximize coverage everywhere.
How often should I run this?
Once a year, and after anything that changes the inputs — a raise, a birth, a house, a marriage or divorce, starting a business. Coverage that was right five years ago rarely still is.
What about long-term care insurance?
It is a real gap for many households and it is not in this check, because the decision turns on age, health and family history far more than on income. It is usually a conversation for the mid-fifties onward.
What about an emergency fund?
It is the layer underneath all of this. Insurance handles the losses too big to absorb; savings handle the ones too small to claim. If you have neither, savings generally come first, alongside whatever coverage work already gives you.
Does this replace an advisor?
No. It finds gaps against standard benchmarks so you know which conversation to have. It does not know your health, your state, your estate, or which carrier would take you.