Business Life Insurance Calculator
How much life insurance do I need for my business?
The loss of an owner, partner, or key employee can throw a business’ survival into uncertainty. Adequate business life insurance coverage can keep it together, but how much coverage is enough? Use the business life insurance calculator to gauge your business life insurance needs online. See the material at the bottom of the page to learn how life insurance coverage needs are calculated for businesses.
[Javascript calculator coming soon. Read on for further help.]
Calculating buy-sell life insurance needs
If you’re using life insurance in order to fund a buy-sell agreement, there’s no question how big a death benefit you need: exactly enough to purchase the insured’s interest in the business.
Calculating key man life insurance needs
Key man life insurance needs can be looked at from either of two directions:
- How much is the business discounted by the loss of the key employee?/How much value did the key employee contribute?
(and) - How much will it cost to find, relocate, and train a replacement?
A quick estimate: the multiple of salary approach
Salary generally reflects the value an employee provides to the company. Therefore, calculating a key employee’s death benefit as a multiple of his or her salary is a quick way to gauge your life insurance needs. 3–10 times annual salary is standard, using a higher multiple for higher salaries.
