Irish Calculators
Insurance planning

Life Insurance Capital Needs Calculator

Calculate the additional capital needed to cover a household income gap and immediate obligations after available resources. This is a needs estimate, not a premium quote, underwriting decision or policy recommendation.

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Your numbers

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How the calculation works

The needs approach estimates capital to support a household after allowing for available assets and usable existing cover. It separates future annual shortfalls from debts and one-off needs, avoiding a simple salary multiple that overlooks those different purposes.

Additional capital = PV of equal annual household shortfalls + debts + one-off costs − available assets − existing cover; minimum zero.

  1. Value annual support

    Discount equal year-end household shortfalls across the selected whole years. With a zero real return, capital equals the annual gap multiplied by the support years.

  2. Add immediate obligations

    Debts to clear and other one-off needs are added without being spread over the support period. These represent capital required at the outset.

  3. Deduct available resources

    Subtract accessible assets and existing usable life cover. If those resources exceed the modelled needs, additional indicated cover is shown as zero.

Worked example: Ten years of undiscounted income needs

Sample inputs demonstrate the method. They are not a forecast or product offer.

The first example needs €10,000 annually for ten years at zero real return, requiring €100,000. Debts and one-off costs add €25,000, while assets and existing cover also total €25,000. Those offset, leaving €100,000 additional indicated cover.

Annual household income gap
10000
Years of income support
10
Real annual return after fees
0
Debts to clear immediately
20000
Other one-off needs
5000
Assets available for these needs
10000
Existing usable life cover
15000

Expected result

Additional cover indicated by these needs
€100,000.00
Capital for annual income gap
€100,000.00
Worked example: One year with enough existing cover

Sample inputs demonstrate the method. They are not a forecast or product offer.

Annual household income gap
1100
Years of income support
1
Real annual return after fees
10
Debts to clear immediately
0
Other one-off needs
0
Assets available for these needs
0
Existing usable life cover
1500

Expected result

Capital for annual income gap
€1,000.00
Additional cover indicated by these needs
€0.00

Understanding your result

The annual-support capital is a planning amount based on the return assumption. A lower return generally means more capital is needed to fund the same future support.

The result is a capital gap, not an insurance premium or underwriting outcome. It does not value policy exclusions, eligibility, payout timing or product suitability.

Questions you might have

Should future income needs rise with inflation?

Enter today’s annual shortfall and a real return after inflation. Do not add inflation again to the same shortfall.

Choosing the right inputs

Annual household income gap
Enter the annual household funding gap after other resources you intend to rely on. If a mortgage will be cleared immediately, remove its future repayments from this income gap.
Real annual return after fees
Use a real annual return after inflation and fees. The annual income gap is stated in today’s purchasing power, so inflation should not be added again.
Existing usable life cover
Include existing cover that would actually be available for the same needs. Do not deduct a policy twice through both assets and cover.

Common mistakes to avoid

  • Avoid including both a debt payoff and the same debt’s future instalments in annual needs.
  • Illiquid or unavailable assets should not be treated as immediately available funding without a realistic plan to use them.

Assumptions to check

  • This is a needs calculation, not a premium, underwriting result or personal policy recommendation.

Sources and method

Read our calculation and testing approach.