Life Insurance Needs Calculator (DIME Method)
Work out how much coverage your family would actually need using the DIME method — Debt, Income, Mortgage, Education — then compare it to the common 10–12× income rule of thumb.
How the DIME method works
DIME adds up the four big obligations life insurance should cover: outstanding Debt (cards, loans, final expenses), Income replacement (annual income × the years your family would need support), the Mortgage balance, and Education costs per child (about $120,000 for four years at a public in-state university, per College Board 2025-26 figures).
From that total, subtract liquid savings, investments, and coverage you already have — often free through an employer — to get the gap a new policy should fill.
Term vs whole life for covering the gap
For most families, level-term insurance covers the DIME gap at the lowest cost: a healthy 35-year-old typically pays $25–40/month for a $500,000 20-year term policy. Whole life costs 5–15× more for the same death benefit and mixes insurance with slow-building cash value. A common approach: buy term for the years your obligations are highest (kids at home, mortgage outstanding) and let it expire as obligations fall.
Frequently asked questions
How much life insurance do I need?
The DIME method gives a personalized answer: debts + (income × years to replace) + mortgage + education costs, minus savings and existing coverage. For many families it lands near 10–12× annual income.
How many years of income should I replace?
Common choices: until your youngest child is independent, until your spouse reaches retirement, or a flat 10 years. More years for single-earner households, fewer if your spouse has strong income.
Does a stay-at-home parent need life insurance?
Yes — replacing childcare, transportation, and household work a stay-at-home parent provides typically costs $30,000–60,000/year. A $250,000–500,000 term policy is a common recommendation.
Is employer life insurance enough?
Employer coverage is usually only 1–2× salary and disappears when you change jobs. Treat it as a supplement in the calculator's 'existing coverage' field, not the foundation.
This tool provides general information and estimates only — it is not insurance advice, and requirements can change. Verify current rules with your state insurance department or a licensed agent. Data verified July 2026.