Finding the gap
Twenty minutes, one sheet of paper, and a number most people have never worked out.
A coverage gap is the difference between what your household would need if you died and what it would actually receive.
Most people have never calculated it, because it requires adding up two lists rather than accepting a rule of thumb.
List one: what would be needed
- Remaining mortgage balance, from a statement
- Other debt with a co-signer or joint borrower
- Income replacement — the annual amount, times the years it's needed
- Childcare, which often increases when a parent dies
- Education you intend to fund
- Final expenses and estate settlement costs
- Any business obligation you've personally guaranteed
List two: what would arrive
- Individual life insurance you own
- Group coverage through an employer — noting it ends with the job
- Savings and investments genuinely available for this
- A surviving partner's income and earning capacity
- Social Security survivor benefits, where they apply
- Pension survivor benefits, if any
The gap is the difference
Subtract list two from list one. That's your gap, and it's the honest number rather than a multiple of salary.
If it's negative, you're adequately covered — which is a legitimate and useful result.
The five most common causes
- Relying on group coverage, which is usually a modest salary multiple and ends with the job
- A policy bought years ago for circumstances that have changed
- A term ending before the mortgage or the children do
- A non-earning partner insured for a token amount or not at all
- Co-signed private student loans nobody counted
The hidden gap
A policy that exists but is about to end is a gap with a date on it. Check when your term expires and what you'll still owe then.
Also check whether a conversion privilege is still live — it usually expires long before the term does, and it's the thing that rescues a term chosen too short.
Review it when life changes
A gap calculation is accurate for about as long as your circumstances are. Marriage, a birth, a move, a new mortgage, a job change and a divorce all change one of the two lists.
Common questions
List what your household would need — mortgage, co-signed debt, income replacement, childcare, education, final expenses — then list what would arrive, including group coverage, savings, a partner's income and survivor benefits. The difference is the gap.
Relying on group coverage that ends with the job, a policy bought for circumstances that have changed, a term ending before the mortgage does, and a non-earning partner insured for a token amount.
That's a useful result. Re-check it after any significant change, and note when your term coverage expires — a policy about to end is a gap with a date on it.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.