{
  "slug": "life-insurance-ladder-sizing",
  "title": "Life Insurance Ladder Sizing Calculator",
  "heading": "Life Insurance Laddering Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/life-insurance-ladder-sizing",
  "summary": "Split term life coverage into layered policies that expire as obligations shrink.",
  "description": "Laddering means buying multiple term life policies with different lengths instead of one big policy, so coverage steps down as big obligations — a mortgage, a kid's college years, a business loan — get paid off, which usually cuts total premium versus keeping the full amount in force for the full term. This calculator takes your total coverage need, splits it into three layers matched to different payoff horizons (mortgage, kids reaching independence, and long-term income replacement), and estimates the ladder's total premium against a flat single-term policy for the same total coverage and longest term, so you can see the typical savings from structuring it this way.",
  "formula": "Layer coverage = obligation amount for each horizon; ladder premium ≈ sum of each layer's coverage × term-specific rate per $1,000; flat premium = total coverage × longest-term rate per $1,000.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=life-insurance-ladder-sizing",
  "inputs": [
    {
      "id": "mortgageBalance",
      "label": "Remaining mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 280000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "mortgageYears",
      "label": "Years left on mortgage",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": null,
      "min": 1,
      "max": 30
    },
    {
      "id": "childRearingNeed",
      "label": "Coverage needed until kids are independent",
      "kind": "number",
      "hint": null,
      "default": 300000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "childRearingYears",
      "label": "Years until kids are independent",
      "kind": "number",
      "hint": null,
      "default": 15,
      "unit": null,
      "min": 1,
      "max": 25
    },
    {
      "id": "incomeReplacementNeed",
      "label": "Long-term income replacement coverage",
      "kind": "number",
      "hint": null,
      "default": 200000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "incomeReplacementYears",
      "label": "Years of long-term coverage",
      "kind": "number",
      "hint": null,
      "default": 30,
      "unit": null,
      "min": 1,
      "max": 30
    },
    {
      "id": "ratePerThousand",
      "label": "Base rate per $1,000 coverage (10-yr term equivalent)",
      "kind": "number",
      "hint": null,
      "default": 1.1,
      "unit": "$",
      "min": 0.1,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "totalLadderPremium",
      "label": "Estimated annual ladder premium",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "flatPremium",
      "label": "Flat single-term policy premium (comparison)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "savings",
      "label": "Estimated annual savings from laddering",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalCoverage",
      "label": "Total coverage across all layers",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Remaining mortgage balance: 280000 $",
      "Years left on mortgage: 20",
      "Coverage needed until kids are independent: 300000 $",
      "Years until kids are independent: 15",
      "Long-term income replacement coverage: 200000 $",
      "Years of long-term coverage: 30",
      "Base rate per $1,000 coverage (10-yr term equivalent): 1.1 $"
    ],
    "outputs": [
      "Estimated annual ladder premium: $1,269",
      "Flat single-term policy premium (comparison): $1,630",
      "Estimated annual savings from laddering: $361",
      "Total coverage across all layers: $780,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter remaining mortgage balance ($).",
      "Enter years left on mortgage.",
      "Enter coverage needed until kids are independent ($).",
      "Enter years until kids are independent.",
      "Enter long-term income replacement coverage ($).",
      "Enter years of long-term coverage.",
      "Enter base rate per $1,000 coverage (10-yr term equivalent) ($).",
      "Read your estimated annual ladder premium on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "mortgageBalance": 170000,
        "mortgageYears": 12,
        "childRearingNeed": 180000,
        "childRearingYears": 9,
        "incomeReplacementNeed": 120000,
        "incomeReplacementYears": 18,
        "ratePerThousand": 0.66
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "mortgageBalance": 280000,
        "mortgageYears": 20,
        "childRearingNeed": 300000,
        "childRearingYears": 15,
        "incomeReplacementNeed": 200000,
        "incomeReplacementYears": 30,
        "ratePerThousand": 1.1
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "mortgageBalance": 450000,
        "mortgageYears": 30,
        "childRearingNeed": 480000,
        "childRearingYears": 24,
        "incomeReplacementNeed": 320000,
        "incomeReplacementYears": 30,
        "ratePerThousand": 1.7600000000000002
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why does laddering save money compared to one big policy?",
      "a": "You stop paying premium on the mortgage-sized layer once the mortgage term ends, instead of carrying that full amount at the longest term's rate for the entire time. Since term life premium rates increase with both coverage amount and term length, shrinking your total in-force coverage as obligations disappear reduces your average annual outlay significantly over the full planning horizon."
    },
    {
      "q": "What obligations typically define each ladder layer?",
      "a": "A common three-layer structure is: mortgage payoff (matches your remaining loan term), dependent care (matches years until your youngest child is financially independent, often 18-22 years old), and long-term income replacement or final expenses (a smaller amount carried the longest, sometimes converted to permanent coverage later). Adjust the layers to match your actual debts and timeline rather than forcing this exact structure."
    },
    {
      "q": "Do I need three separate policies, or can one insurer do this in one contract?",
      "a": "Most people buy three separate term policies, sometimes from different insurers to get the best rate at each term length, since a 15-year term and a 30-year term from the same carrier don't always both be competitively priced. Some carriers do offer 'laddered' or multi-term products, but shopping each layer separately usually gets a better blended rate."
    },
    {
      "q": "What happens to underwriting each time I buy a new layer?",
      "a": "Each policy is underwritten independently, meaning you'll go through health questions or a medical exam again for each layer bought at a different time, and your rate locks in based on your age and health at that purchase date. Buying all layers around the same time while young and healthy avoids re-underwriting risk later if your health changes."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/umbrella-policy-sizing",
    "https://www.revenuelab.fyi/toolbox/disability-benefit-gap"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Life Insurance Ladder Sizing Calculator (https://www.revenuelab.fyi/toolbox/life-insurance-ladder-sizing)"
}