Executives and professionals are often the most underinsured people in the room. Your compensation is complex — base salary is just the beginning. Deferred compensation, equity awards, and executive benefits create income streams your family depends on that simply disappear at death. This tool helps you see the full picture: what your family needs to maintain their way of life, and what you stand to lose from compensation that never gets paid out.
I.
About You
Basic profile for calculations
Your Age
Marital Status
Number of Dependents
Youngest Child Age
0 if no children
Spouse / Partner Income
Annual, if applicable
Existing Life Insurance
Total in force today
II.
Personal & Family Protection
What your family needs if you're gone tomorrow
Annual Personal Income (yours)
Salary, distributions, or W-2 you take from the business
Income Replacement Years
Until youngest child is 25, spouse retires, or family is self-sufficient
Mortgage Balance
Other Personal Debt
Auto loans, personal loans, HELOCs
College Funding Goal
Total for all children (4-year estimate)
Final Expenses & Estate Costs
Funeral, legal, estate settlement
Liquid Personal Assets (offset)
Cash, brokerage, 401k — assets your family could live on. NOT the business value.
Income Replacement Method
We use a present value calculation assuming a 5% discount rate. This reflects what a lump sum today would need to generate your income for the selected number of years — more accurate than a simple multiple.
III.
Executive Compensation & Benefits Exposure
The income your family loses that a W-2 doesn't capture
Deferred Compensation Balance (NQDC)
Non-qualified deferred comp account balance — at-risk if the company is insolvent at your death
Unvested RSUs / Restricted Stock Value
Current value of unvested equity awards that would be forfeited or accelerated
Unvested Stock Options (intrinsic value)
In-the-money value of unvested options — what your family would lose if not accelerated
Annual Bonus (expected, at-risk)
Target or expected annual bonus — often forfeited pro-rata at death
Executive Pension / SERP Value
Supplemental Executive Retirement Plan — present value of benefit your spouse would lose
Employer-Provided Group Life (in force)
Group term coverage through your employer — typically 1–2× salary, not portable
Additional Executive Risk Factors
IV.
Coverage Analysis & Results
Your estimated insurance needs, broken down
Personal / Family Coverage Needs
Executive Compensation Coverage Needs
| Coverage Category | Purpose | Amount |
|---|
Methodology: Income replacement uses the present value of an annuity formula: PV = PMT × [1 − (1+r)^−n] / r, where r = 5% annual discount rate. Executive compensation exposures (deferred comp, RSUs, options, bonus, SERP) are included at face value as income your family would lose. The NQDC creditor risk buffer adds 10% of your deferred comp balance to reflect insolvency exposure. Employer group life is subtracted as an offset.
Important: This tool provides an educational estimate only. Actual insurance needs depend on your specific plan documents, vesting schedules, equity agreements, estate tax exposure, and insurability. Work with a licensed advisor and your plan administrator to determine appropriate coverage.
Important: This tool provides an educational estimate only. Actual insurance needs depend on your specific plan documents, vesting schedules, equity agreements, estate tax exposure, and insurability. Work with a licensed advisor and your plan administrator to determine appropriate coverage.
V.
Type of Insurance to Consider
Not all policies serve the same purpose — and for executives, the structure matters
Personal & Family Protection
Term Life — Income & Mortgage Replacement
For pure income replacement and debt payoff, level term remains the most efficient solution. Match the term to when your youngest child becomes self-sufficient or your spouse reaches retirement. 20–30 year terms are typically appropriate at your income level.
Don't Rely on Group Term
Employer-provided group life is typically 1–2× your base salary — often a small fraction of your total compensation. It's also not portable: if you leave, retire, or are displaced, the coverage disappears. Personal coverage should stand on its own.
Executive Compensation Protection
Permanent Life — Deferred Comp & Estate Needs
Non-qualified deferred compensation, SERP benefits, and estate liquidity needs often require permanent coverage. Unlike term, permanent policies don't expire — they're there when your estate needs them, regardless of when that is.
Equity & Bonus Exposure — Term or Permanent
Unvested RSUs, options, and at-risk bonuses represent real income your family is counting on. A laddered term strategy — shorter terms for near-term vesting schedules, longer terms for ongoing income — can efficiently cover this exposure without over-insuring.
NQDC Risk — A Note on Creditor Exposure
Non-qualified deferred comp is an unsecured promise from your employer — not a protected asset. If your company becomes insolvent, that balance may be lost entirely. Life insurance can provide a protected, portable alternative to ensure your family isn't exposed to your employer's financial health.