Comprehensive Life Insurance Analysis

How much life insurance do you need? This comprehensive life insurance calculator includes detailed net worth analysis, budgeting and college savings to help you decide how much life insurance you might need. You can also adjust the inflation rate and your expected rate of return to see how these variables can impact your insurance needs.

Definitions

Years for insurance income to last

Number of years your spouse will need to use your insurance proceeds to provide for living expenses and income.

Guaranteed investment certificates

Total amount of life insurance coverage you currently have for yourself.

Inflation rate

This is the rate that you expect your expenses and income to rise. Your total expenses and earned income are increased by this rate for each year you require income.

Return on investments (after tax)

The annual percentage rate you expect to earn on your savings. This includes any insurance proceeds and your educational savings. You may wish to use a more conservative rate of return if you will need to begin using your insurance proceeds immediately. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2006, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less.It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect additional sales charges and fees that funds may charge. This calculator compounds all growth annually. For the purposes of this calculator taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains you should enter your after tax rate of return. Insurance products may additionally include mortality, expense risk charges, cost of insurance, administrative, and surrender charges that will have a significant impact on the total rate of return for the investment.

Home

Current value of your home. This should be as close as possible to the actual market value of your home. If you have owned your home for a number of years, the current market value could be significantly higher than your original purchase price.

Other real-estate

The value of any other real-estate you may own. Include second homes, undeveloped land, rental property or any commercial buildings you may have an interest in. As with your home, use the actual market value of this real-estate.

Automobiles

This is the total value of all automobiles that you own. Do not include any leased vehicles.

Other vehicles

If you own any other vehicles, such as RVs, campers or collectibles, enter them here.

Jewelry

The value of any jewelry, gems or precious metals such as gold. If you have owned these items for a number of years they may have appreciated in price, remember to use the current market value.

Other personal property

The value of other assets. This might include items such as furniture, home electronics, silverware, etc.

Registered retirement accounts

The current total balance of your registered retirement accounts. This would include RRSPs (term deposits, mutual funds), RRIFs, Employer Pension Plans, annuities and any other registered retirement savings you may have.

Bonds

If you own any Treasury, municipal, or commercial bonds enter the total here.

Stocks

If you own any individual stocks, enter the total here. Again, do not include any stocks that are held in a registered retirement account.

Mutual funds

If you own any mutual funds, enter the total here. Do not include any mutual funds that are in your registered retirement accounts, they were already included in the "Registered retirement accounts" line.

Guaranteed Investment Certificates

If you own any Guaranteed Investment Certificates enter the total here.

Checking and savings

The current total balance of your checking and savings accounts.

Liquid assets

If you have any other cash or liquid assets, enter the total here.

Other investment assets

If you have any other investment assets of value, you can enter the total here.

Home mortgage principal

This is the current principal balance remaining on your mortgage. This is the amount that you would have to pay to own your home free and clear.

Other mortgage principal

This is the current principal balance for any other real-estate mortgages you may have. This includes mortgages on rental property, undeveloped land, commercial property or any other real-estate.

Auto loans

Total amount you currently have outstanding on your auto loans.

Student loans

Total amount, if any, that you currently owe in student loans. You should enter the total outstanding even if these loans are currently in deferment.

Credit card debt

Your total credit card debt.

Other loans

Total amount, if any, of any other loans you may have.

Taxes on assets

Estate taxes are required to be paid upon your death.

Probate costs

Probate costs cover legal fees for disbursing the assets of the deceased. You may incur significant probate costs even if you have a will.

Funeral costs

All costs required to cover the cost of the funeral.

Other expenses

Any other expenses you might have that would need to be paid if you or your spouse died.

Current age of children

Current age of your children. This calculator is based on each child beginning their college education at age 18. The difference between their current age and 18 is the number of years you have to save.

Annual tuition and books

Current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school they may be interested in attending. For the purposes of this calculator all expenses are assumed to be due at the end of the year.

Living expenses

Current estimated cost of one year living expenses. Like tuition and books, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator all expenses are assumed to be due at the end of the year.

Surviving spouse's monthly income

Input your income from your paycheque. Click on the button "Income Calculator" to enter the details of your surviving spouse's paycheque and any deductions.

Monthly living expenses

This is the total of all of your monthly expenses. Click on the button "Living Expenses Calculator" to enter your monthly expenses. This includes your expenses for housing, insurance, loan payments, utilities, and other miscellaneous items.