Life Insurance Coverage Gap Calculator

Most people discover a coverage gap not because they were careless, but because the amount they need changed and the policy did not. A mortgage, a child, a career change or a business loan all move the requirement without touching the policy.

This calculator states the gap plainly and, if you enter a rate per $1,000 from a quote, estimates what closing it would cost in annual and monthly terms.

Result

Coverage gap

$500,000

Estimated annual cost to close

$550

Status: Under-insured against the stated need
Coverage needed: $750,000
Coverage in force: $250,000
Share of need covered: 33.33%
Surplus: $0
Estimated monthly cost: $46

This is an estimate based on the values you entered. Actual premiums, coverage, eligibility and pricing vary by provider and by individual circumstances.

The cost to close the gap uses the rate per $1,000 you entered. Rates change with age, health, property characteristics and carrier.

How to use the life insurance coverage gap calculator

Enter the coverage amount you need - the needs analysis from the life insurance calculator is a good source.
Enter the total cover currently in force, including any employer group cover.
Enter the rate per $1,000 from a recent quote, if you have one.
Read the gap and the estimated cost to close it.

What people use this for

Turning a needs analysis into a concrete buying decision.
Checking whether an employer policy plus an individual one is enough combined.
Estimating the budget impact before applying for additional cover.
Reviewing cover after a change that moved the requirement.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A significant shortfall

$750,000 needed against $250,000 in force, at a quoted rate of $1.10 per $1,000 of cover.

Coverage gap: $500,000
Estimated annual cost to close: $550
Estimated monthly cost: $46

Already covered

The same need with $800,000 in force.

Coverage gap: $0
Status: Need is covered
Surplus: $50,000

Where the rate per $1,000 comes from

Life insurers quote a rate for each $1,000 of cover, and that rate depends on age, health, tobacco use, occupation and the term chosen. It is not something a calculator can determine - only underwriting can.

If you have a quote, divide its annual premium by the cover in thousands to get the rate, then use it here to price a different amount. If you do not, leave the field at zero and the gap is still reported.

Closing a gap is not always a new policy

Increasing an existing policy, adding a rider, converting a convertible term policy, or buying a second smaller policy alongside the first are all options, and which is cheapest depends on the original policy and on your health now versus then.

Where health has deteriorated since the first policy was issued, a guaranteed insurability rider or a conversion option on the existing policy can be worth considerably more than a fresh application.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

The gap is the needed amount minus the current amount, floored at zero. A surplus is reported separately rather than as a negative gap.
The cost to close applies the rate per $1,000 you entered to the gap. It is an estimate, not a quote - rates depend on underwriting.
All figures are estimates produced from the values you enter. This site has no rate feed and no carrier data, so it cannot quote or price a policy.
Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator provides an estimate based on the information you enter. Actual insurance premiums, coverage, eligibility and pricing vary by provider and individual circumstances.

This website is not an insurance company, an insurance agency or a licensed broker. It does not sell insurance, does not provide insurance quotes, and is not authorised to give advice about which policy you should buy.

No result produced here is an offer of insurance or a guarantee of coverage. Only a licensed insurer or agent, working from your verified details, can quote or bind a policy.

Frequently asked questions

Should employer cover count toward the current amount?

Yes, but note that it usually ends with employment. A gap that only closes while you stay in a job is a fragile position.

Is it cheaper to increase a policy or buy a second one?

It depends on the original policy terms and on your health now. Ask the existing insurer first; if health has changed, an existing policy option may be far cheaper than a new application.

What if I have a surplus?

Cover costs money every year. If the surplus is large and persistent, reducing it releases budget for other goals - though check any conversion or guaranteed insurability options before cancelling.

How often should I check the gap?

After any significant change, and otherwise every two or three years. The requirement moves more than most people expect.

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