Life Insurance Decision Lab

Understand whether life insurance is worth buying, what kind makes sense, and how much protection your family would actually need.

Who needs protection?

Start with the people, and how long they'd need help.

Would anyone struggle financially if you died?

YesA spouse, children, a parent, or someone else NoNo one relies on my income or care

Your age

Sex at birth

Used only for the population mortality baseline.

Your annual take-home income

Used for the affordability and utility checks.

Family's annual need after your death

Essential spending, childcare, housing, and insurance.

Annual income still available

Survivor income, dependable benefits, or rental cash flow.

Years support is needed 20 years

Usually until the kids are independent or you'd retire.

What would be left behind?

Add the obligations, then subtract what your family could actually use.

Debts to pay off

The mortgage and any other debt you don't want handed down.

Future goals

College, care, or another commitment you'd want kept.

Available savings and investments

Only assets your family could realistically spend.

Existing life insurance

Count employer coverage only if you expect to keep it.

Fine-tune the assumptions

Immediate and final expenses

Real discount rate 2.5%

Expected investment return after inflation. Lower is more conservative.

Mortality adjustment 1.00×

Leave at 1× unless you have a sound reason to move off the population baseline.

Protection preference 3.0 / 5

Higher values put more weight on avoiding a severe family shortfall.

Is the need temporary or lifelong?

This matters more than any investment illustration.

A dependent may need financial support for lifeFor example, a child or adult with lifelong care needs. My estate may need permanent liquidityPotential estate tax, equalization, or a guaranteed final expense. A business agreement requires permanent coverageBuy-sell, key-person, or succession planning. I require a guaranteed inheritanceA requirement — not just a preference if assets happen to remain.

Coverage looks worth it Live result

Life insurance likely protects a real family need.

Your current resources don't fully cover the income gap and one-time obligations you entered.

Estimated new coverage $1.2M Range: $950K–$1.4M

Likely policy fit 20-year level term Protection through about age 55

Family plan funded today34%

With recommended coverage100%

Start with level term. It covers the years of financial dependence directly, without mixing insurance and investing.

What drives the answer

The largest inputs, in order.

$820,000Present value of $50,000 per year for 20 years

$425,000Debts, future goals, and immediate costs

−$150,000Usable assets and insurance already in place

Why a range?

The low and high estimates vary the annual need and the investment return. If a policy only works at the optimistic edge, it's fragile.

The formulas underneath

Transparent enough to challenge.

Present-value needWhat future shortfalls are worth today

PV = annual shortfall × [1 − (1 + r)⁻ⁿ] ÷ r

Annual shortfall$50,000

Present value$820,000

+ Debts, goals & final costs$425,000

− Existing resources−$150,000

Estimated coverage gap$1,095,000

Probability over the termA population baseline, not a personal forecast

P(death) = 1 − ∏ [1 − q(age + year)]

20-year population estimate6.1%

Expected death-benefit payout$61,000

Scheduled nominal premiums$15,600

Expected utilityWhy insurance can help despite a negative cash return

EU = (1 − p)·u(alive resources) + p·u(death resources)

Present value of quote premiums$14,300

Utility result at your preferenceProtection adds utility

The model uses constant-relative-risk-aversion utility. In plain terms: it values avoiding a severe family shortfall more than adding the same dollars to an already-funded outcome. That's the whole reason insurance can be worth buying even though the average buyer pays in more than their family gets out.

Before buying

Compare several quotes for the same benefit and term. Check that premiums are guaranteed level, that the policy is convertible, and that the carrier is financially strong.

Planning estimate only. This isn't an underwriting quote, a medical assessment, a tax opinion, or individualized financial advice. Mortality estimates use interpolated 2023 Social Security Administration population life-table rates; individual underwriting can differ materially. Confirm Social Security survivor benefits, employer coverage portability, taxes, and permanent-policy illustrations with qualified professionals.