What this calculator tells you
A grieving family should not also face bills they cannot pay, yet debts often survive the borrower. Mortgages, car loans, credit cards, and student loans can fall on a surviving partner, a co-signer, or an estate, and payments keep coming after the supporting income stops.
This calculator adds up what you owe and subtracts cover you already have. The gap is not a full life insurance recommendation, just one clear piece: the amount needed to leave your family debt-free.
The formula behind the result
Cover gap = mortgage + car loan + credit cards + student loans + other debts, minus existing life cover, floored at zero.
Each field is a balance owed today, not a monthly payment. Add every debt that would still be standing if you died tomorrow, including jointly held loans and co-signed loans, because your family or co-signer may have to deal with them even after your income stops.
Existing cover means life insurance already in force, not savings, pensions, or a work policy that ends with employment. If a work policy is your only cover, count it separately rather than relying on it fully.
How to fill in each field
- Enter the current balance of each debt, leaving any field at zero if it does not apply to you.
- Enter existing life cover that would definitely pay out to your family.
- Read the gap figure, which is the extra cover needed to clear every debt in full.
Worked example
Take a household with a $250,000 mortgage, a $15,000 car loan, $8,000 on credit cards, $25,000 in student loans, and $5,000 of other debts. The total debt is $303,000. If the family already has $50,000 of life cover, the remaining gap is $253,000.
That gap is the extra cover needed to clear every debt at once. A family with no existing cover would face the full $303,000, which shows why even a modest existing policy makes a real difference.
When the result may be too high or too low
Some student loans in the USA are discharged on death, while private or co-signed loans often are not, so check each loan's terms before counting it. Tax and business debts need separate advice, and rules differ in the UK, Canada, and Australia.
The gap also ignores income replacement, funeral costs, and future college costs. Use it as a debt-only check, then combine it with a broader needs calculation before choosing a policy size.
Frequently asked questions
Do debts disappear when someone dies?
Debts usually pass to an estate, and a co-signed debt can fall directly on the co-signer. A mortgage lender can also require repayment or sale. Life cover gives the family a lump sum to settle debts without a forced sale.
Should I enter the loan balance or the monthly payment?
Enter the full balance, not the monthly payment. Life cover is meant to clear the balance in one payment, while the monthly payment only matters for the family's cash flow while the debt is still outstanding.
What if my family has savings to pay off debts?
Yes, if you have savings your family could use to clear debts, count them separately in a needs calculation. This tool focuses on the debt gap alone, so it may show more cover than a family with large savings actually needs.
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Edited and checked by Talha Shah. Last reviewed 2026-11-04.