A lump-sum payout has to last. See how long it holds up at a given monthly need.
This calculator shows how long a life insurance payout would support your family, drawing a set monthly amount from proceeds that are invested at a chosen return.
A lump-sum life insurance payout has to replace income for years, so the real question is how long it lasts at your family's monthly need. Invested at a modest return and drawn down monthly, the proceeds last longer than simple division suggests, because the remaining balance keeps earning. The calculator models that.
If the proceeds run out too soon, the policy may be too small, our life insurance calculator helps size coverage using income replacement and the DIME method. If the monthly need is below the growth on the balance, the proceeds can last indefinitely. This estimate ignores taxes and inflation, so treat it as a planning guide.
It depends on the payout, the monthly need, and the return earned on the balance. Enter them above for an estimate in years and months.
Death benefits are generally income-tax-free to beneficiaries, though any interest earned afterward is taxable. This estimate ignores taxes.
Enough to cover your family's income needs, debts, and future costs. Our life insurance calculator sizes it with the DIME method.
See the exact formula and a worked example on our methodology page.