Life Insurance Calculator

With a baby on the way later this year, it’s the first time I’ve had to contemplate taking care of a dependent (not counting pets of course). One of the duties in this regard is ensuring that your dependent will be financially supported in the event of your death. Not a pleasant topic to think about, unless maybe you are from Bhutan, but a necessary one.

The main question is how much insurance do I need? To answer, I threw together this LibreOffice spreadsheet as a “back of the napkin” type calculator. It is definitely only meant as a rough guide and does not rigorously examine inflation nor taxes to a fine precision (although it does take them into account somewhat). The cells in blue are what you will edit to set the parameters for your specific case.

Losing a parent is probably not going to easy for a child, so I am erring on the side of overcompensation. Post-secondary education is one such example that others might consider optional, but I wanted to ensure it was fully covered.

I was surprised at the cost of post-secondary education compared to 15-20 years ago. I’m not sure what form education will even take in 20 years, but it’s hard to imagine the costs continuing to rise and the value proposition still being there in an age of information abundance. Nevertheless, I am including it.

The “both parents die” case was also interesting to examine. I thought for sure it would be the worst case scenario, financially speaking, but turns out it’s a non-issue when both parents have some retirement savings.