What is a life insurance needs analysis?

A needs analysis works out how much money the people who depend on you would actually require if you died or became unable to work, rather than applying a rule of thumb like a multiple of income. It adds up what has to be paid or replaced, subtracts the resources already in place, such as existing coverage, savings and group benefits, and the gap that remains is the shortfall insurance is meant to close. Done well, it separates family obligations from business obligations from the tax due at death, because those are different problems that call for different amounts, owners and policy types.

Should I count my existing coverage and savings?

Yes. The point of a needs analysis is the gap, not the gross obligation. Existing life coverage, liquid savings, and in some cases group benefits already offset part of what would be needed, so they are subtracted from the total requirement. What is left is the real shortfall. Counting them honestly is what keeps the resulting number defensible rather than inflated, and it is why two families with the same income can arrive at very different coverage figures.

Why separate family, business, and estate needs?

Because they are three different problems with different owners. Family continuity is an income-replacement problem, usually met by personally owned coverage payable to the family. Business continuity is an ownership and liquidity problem, often met by coverage tied to a shareholders' agreement or held to protect against the loss of a key person. Estate liquidity is a tax-funding problem, sometimes best addressed with corporately owned insurance. Blending them into one policy, one owner and one number tends to leave one of the three exposed. Keeping them separate is what lets each be funded and owned correctly.

How is tax at death on registered assets calculated?

Canada has no separate estate or inheritance tax, but registered assets such as RRSPs, RRIFs, LIRAs and LIFs are generally deemed to be fully included in income in the year of death, and that inclusion is taxed on the final return at the applicable marginal rates. On a large balance this can approach the top marginal rate for the province. A qualifying rollover to a spouse, common-law partner or financially dependent disabled child defers the tax, but it does not eliminate it, on the second death the same value is taxed with no spouse left to roll to. This tool estimates that first-layer income tax so the liability can be planned for rather than discovered.

Is this calculator a life insurance quote?

No. It is a carrier-neutral planning illustration, not an offer to insure and not a quotation. It estimates how much coverage would be needed to meet the obligations you enter; it does not price a specific policy, and any actual insurance is subject to a formal application and underwriting. The figures are a defensible starting point for a conversation, and using the tool does not create an advisor-client relationship.

Coverage Estimator

A defensible starting number, not a substitute for the conversation.

Q: How much life insurance does a business owner need?

There is rarely a single number, because a business owner is usually carrying three separate obligations that happen to be funded by insurance. The first is family continuity: replacing income, clearing the mortgage and debts, and funding education so the household can carry on. The second is business continuity: buy-sell obligations to co-owners, personally guaranteed business loans, and key-person exposure. The third is estate liquidity: the income tax that falls due on registered assets and private-company shares at death. Each is owned by a different party, for a different reason, and collapsing them into one figure usually gets the structure wrong. Sizing them separately is the point of a proper needs analysis.

This tool estimates life, disability, and critical-illness need, and the income-tax exposure on registered assets at death. It is carrier-neutral and illustrative — a place to begin, before we talk about what the numbers mean for your situation.

The inputs

Enter what you know. Blanks are treated as zero. Nothing you type is stored or transmitted — the math runs entirely in your browser.

Who we’re protecting

Name (for the report)

Age

Retirement age

Sex (rates)

Province

Smoker status

Income

Compensation type

Annual income (T4)

Income growth %/yr

Survivor income %

Obligations

Mortgage

Other debt

Dependent children?

Youngest child age

Independence age

Education fund

Final expenses

What’s already in place

Existing life

Liquid assets

Existing DI (/mo)

Existing CI

Term length (premium est.)

Business-owner layer

Personally guaranteed loans

Buy-sell obligation

Key-person value

Registered assets at death

Province at death

RRSP

RRIF

LIRA

LIF

Pension CV

Other income in year of death

Beneficiary

Planning assumptions

Investment return %

Inflation %

A number is only the beginning of the thinking. If any of this raises a question worth talking through, you can begin a conversation.

About this tool

How much life insurance a business owner actually needs

Most coverage rules of thumb — ten times income, or a round number that sounds prudent — miss the point for a business owner, because an owner is rarely solving one problem. There are usually three, and they belong to different people. This calculator sizes each of them separately rather than collapsing them into a single figure.

Family continuity is an income-replacement problem: replacing what the household lives on, clearing the mortgage and debts, and funding education so the family can carry on. Business continuity is an ownership and liquidity problem: buy-sell obligations to co-owners, personally guaranteed business loans, and the cost of losing a key person. Estate liquidity is a tax-funding problem: the income tax that falls due on registered assets and private-company shares at death, which Canada taxes on the final return even though it has no separate estate tax.

You enter what you know — income, debts, existing coverage, savings, business obligations, and registered balances — and the tool estimates the shortfall for each obligation after the resources already in place are subtracted. The result is a defensible starting number, not a quote. It is where a planning conversation begins, not where it ends: how each obligation is owned, funded, and structured is the work that follows.

By introduction

Most of our work begins with a conversation.

Begin a conversation

Important — please read

This estimator is provided for general information and illustration only. It is not an offer to insure, not a quotation, and not financial, tax, legal, or accounting advice. Coverage figures are planning estimates; any actual insurance is subject to a formal application and underwriting.

Income-tax figures use 2026 federal, provincial, and territorial rates for all jurisdictions outside Quebec, per current Canada Revenue Agency and federal/provincial finance authority data (2026 tax year; last verified August 2026). Federal, CPP/CPP2, and EI figures are confirmed to CRA; provincial bracket figures should be confirmed with a professional advisor before reliance. Rates change with each tax year and mid-year budgets; figures should be reconfirmed before reliance. Tax outcomes at death are complex and depend on individual circumstances — consult a qualified tax advisor and estate lawyer before acting.

Insurance products and services referenced on this page are provided through Sheldrake Group Inc. O/A Sheldrake Group, a licensed life insurance agency in Ontario. Zachary Sikorski is licensed to provide life and accident & sickness insurance in the Province of Ontario. Sheldrake Group Inc. O/A Sheldrake Group is licensed to transact insurance in Ontario only, and nothing on this page is directed at, or intended for, residents of any other jurisdiction. Using this tool does not create an advisor-client or other professional relationship, which is established only through a separate, express engagement. See our Legal & Disclosure and Privacy pages for full terms.