A resource for families & business owners
How much life insurance do you actually need?
There are two well-established ways to size a death benefit — the Human Life Value method and the needs-based method. Below you’ll find a working calculator for each, an explanation of when to lean on which, and an honest note on the coverage these numbers don’t include.
Life insurance only
Both calculators size a death benefit — the lump sum your family receives if you pass away. They do not size disability, critical illness, or long-term care coverage. A complete plan addresses those too. More below.
A starting point, not a quote
These are planning estimates to frame the conversation. Your real number depends on tax treatment, existing group coverage, business interests, and goals. Confirm with a qualified advisor before buying or cancelling any policy.
01 — The two methods
Two honest ways to answer the same question.
Neither method is “right.” They look at your life from different angles — one measures the economic value of your future earnings, the other tallies the specific obligations your family would have to meet. In practice, a good plan looks at both and reconciles them.
HLV
Human Life Value
An economic view. It treats your future earning power as an asset and calculates today’s value of all the income you’d contribute to your family between now and retirement — discounted back to a present-day lump sum.
Best when you want to replace a breadwinner’s full lifetime earnings, or you’re comparing against the maximum an insurer would issue. It tends to produce a larger, more generous figure.
Needs
Needs-Based Analysis
A goals view. It adds up the concrete costs your family would face — final expenses, debts, the mortgage, years of income replacement, education — then subtracts what you already have in savings and existing coverage. What’s left is the gap.
Best when you want coverage tailored to real obligations rather than a formula. This is the approach most planners build a recommendation around.
02 — Calculator one
Human Life Value calculator.
This capitalizes the income you’d dedicate to your family over your remaining working years. Enter your after-tax income, the share you spend on yourself (which disappears at death and isn’t replaced), and reasonable assumptions for raises and a discount rate.
The present value of the income you’d contribute to your family over 25 years. Think of it as the upper end of the coverage conversation.
03 — Calculator two
Needs-based calculator.
Sometimes called the DIME method — Debt, Income, Mortgage, Education. Add up what your family would need to cover, then subtract the resources already in place. The difference is the coverage gap a policy would fill.
The additional life insurance that would close the gap between what your family needs and what they already have.
04 — The other half of the plan
A number for death is only half the answer.
Living benefits · not covered above
Both calculators above answer one question: what if you die? The harder question is — what if you don’t, but you can’t work?
Through your working years, you are statistically more likely to face a disability or a serious illness that interrupts your income than to die before retirement. Life insurance pays nothing in those scenarios. The mortgage, the groceries, and the cost of care all continue — while the paycheque stops.
That’s why a complete protection plan looks beyond the death benefit to living benefits: disability insurance to replace income if you can’t work, critical illness insurance for a lump sum on a serious diagnosis, and long-term care for later in life. Sizing these is a separate exercise — one these calculators deliberately don’t attempt.
Life, disability and critical illness insurance are core to what Edward does. The life insurance figure above is a great start — let’s make sure the rest of the plan is just as solid.
Got a number? Let’s pressure-test it.
Bring your figures to a relaxed, no-obligation conversation. We’ll refine them against your real situation — and make sure living benefits are part of the picture.
General information only, not individualized financial, tax, or legal advice. These calculators produce planning estimates in Canadian dollars and make simplifying assumptions; they do not account for taxes on benefits, inflation beyond the inputs you provide, existing group coverage terms, or business interests. They size a death benefit only and do not assess disability, critical illness, or long-term care needs. Confirm your own position with a qualified advisor before purchasing or cancelling any policy.