Life Insurance Needs Calculator
Work out how much life insurance you need from your income, debts and existing cover, with a self-employed mode for missing group benefits.
CPP pays a modest, capped survivor's pension and a one-time $2,500 death benefit, but neither comes close to replacing a working-age household's income — and self-employed/incorporated contractors typically have NO employer-provided group life insurance top-up at all (unlike T4 employees, who often get 1-2x salary in basic group life through a benefits plan), so the real coverage gap for a contractor is usually larger than for an equivalent-income employee. Incorporated contractors can also hold a corporate-owned life insurance policy, which has different tax treatment (premiums generally non-deductible, but proceeds can flow through the corporation's capital dividend account largely tax-free to the estate) versus a personally-owned policy — a nuance worth surfacing in the UI rather than in this default-assumptions config.
Working out how much life insurance cover you actually need
CPP provides a modest, capped survivor's pension and a one-time $2,500 death benefit — nowhere close to replacing a working-age household's income — and self-employed contractors typically have no employer group life insurance top-up at all, unlike T4 employees who often get one to two times salary through a workplace benefits plan.
What this calculator factors in
- Income replacement based on your household's actual income and a chosen number of years of coverage, rather than a generic multiple
- Outstanding debt, such as a mortgage or loans, that would otherwise fall to survivors
- Existing coverage, including any employer group life you currently have, which self-employed contractors typically don't
- A note on corporate-owned policies for incorporated contractors, where premiums are generally non-deductible but proceeds can often flow to the estate largely tax-free through the corporation's capital dividend account
