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*Both the future expenses and future income totals are expressed as the amount of cash required today, invested at your expected rate of return, to equal the total future cash flow. For example, if you are expecting to receive $1,000 in exactly one year, that $1,000 has the same value as $909 today invested at 10%. Our totals show these current amounts to calculate the life insurance you require today to cover your future expenses after your future income is taken into account.
Current life insurance coverage
Total amount of life insurance coverage you currently have for yourself.
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.
This is the rate that you expect your expenses to rise. Your total expenses and earned income are increased by this rate for each year you require income. The income you would receive from your life insurance policy is used to cover any shortfalls between your expected income from all sources and your expenses.
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 dependent on the type of investments you select. For example, for the last thirty years the average annual rate of return for the TSX is about 10%. Savings accounts at a bank or credit union may pay as little as 2% 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. 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.
Cash and savings
Total you have in cash, chequing accounts, savings accounts or other accounts that can be used to help cover expenses.
Total value of all investments that you are willing to use toward your living expenses.
Taxes on assets
Estate taxes are required to be paid upon your death.
Probate costs cover legal fees for disbursing the assets of the deceased. You may incur significant probate costs even if you have a will.
All costs required to cover the cost of the funeral.
Uninsured medical costs
Any medical costs that are not covered by your medical insurance. Make sure to include any deductibles.
Credit card debt, auto loans, home equity loans, mortgages or other debt that you wish to repay. Providing the ability to repay these loans if you were to die can significantly help your family meet its monthly living expenses.
Spouse income from work
Income expected from your spouse after your death. If your spouse needs education or retraining, make sure that the starting year for this income provides adequate time to complete.
Living expenses with children at home
Total monthly expenses while your children are living at home. This should include all monthly expenses except child care.
Living expenses with children gone
Total monthly expenses after your children have left home. This should include all monthly expenses.
Children’s education expenses
Current monthly expenses for your children’s educational expenses.
Retraining and education for spouse
Monthly expenses expected to cover any cost of education or retraining for your spouse to re-enter the workforce.
Any other monthly expenses not included above.
The amount of funds available to your family after your expenses at death have been covered. This includes any current life insurance.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.