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Term Life Insurance Calculator

See what term life coverage will cost you.

How it is calculated

The tool prices a level-premium policy from a quoted rate per 1,000 of coverage. First annual premium = coverage ÷ 1000 × rate_per_1000. Then monthly premium = annual premium ÷ 12 and total premiums = annual premium × term_years. Coverage (the death benefit) is in dollars, the rate is the yearly cost in dollars per 1,000 of coverage, and the term is in years. None may be negative; zero is accepted and gives zero. The rate can be at most 1,000 per 1,000 and the term at most 100 years; larger values show no result. The same annual premium is assumed for every year of the term, so rate changes with age, medical underwriting, policy fees, taxes and payment-frequency surcharges are not included. Take the rate from an actual quote, because it depends on age, health and insurer.

Worked example

You want 500,000 of coverage for a 20-year term and a quote says 1.20 per 1,000. Coverage ÷ 1000 is 500, so the annual premium is 500 × 1.20 = 600. Spread over 12 months that is 600 ÷ 12 = 50 a month. Over the whole term you would pay 600 × 20 = 12,000. The tool prints an annual premium of $600.00, a monthly premium of $50.00 and total premiums of $12,000.00.

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Common mistakes

  • Entering the rate per 100 or as a percentage. The field is the yearly cost per 1,000 of coverage, so a rate of 1.2 means 1.2 dollars per 1,000, not 1.2%.
  • Using a monthly premium rate in the rate field. The tool treats the rate as yearly and divides by 12 itself, so a monthly rate would understate the cost.
  • Believing the premium is fixed for the whole term when the quote is for the first year only. The total shown assumes a level premium for every year.
  • Entering the term as months. A 20-year policy is 20, not 240; 240 is above the 100-year limit and shows no result.
  • Entering the total premium or a rate above 1,000 in the rate field. A rate that high would cost more each year than the benefit pays, so the tool rejects it.

About this calculator

Term life insurance provides coverage for a fixed period — typically 10, 20, or 30 years — and pays a death benefit to beneficiaries only if the insured dies during that term, which is why it's dramatically cheaper than permanent (whole life) coverage that lasts a lifetime and builds cash value. Premiums are driven mainly by the coverage amount, the length of the term, and a rate that reflects the insured's age, health, and risk profile.

Because it's pure protection with no investment component, term life is the default recommendation for covering a specific financial obligation — a mortgage, a child's years until adulthood, or an income-replacement window — at the lowest possible cost.

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