Estimate how much life insurance would protect your family using the needs-based DIME method: Debts, Income replacement, Mortgage and Education. Subtract the coverage and savings you already have to see the additional amount to shop for, with every step shown.
Last updated:
Income (the I in DIME)
$
Your gross yearly income
years
e.g. until the youngest child turns 18
%
Some planners use 70–80% since your own costs stop
%
Lower = more cautious; 0% = no discount
Debts, mortgage, education
$
Car loans, credit cards, student and personal loans
$
Funeral, medical and estate costs
$
$
e.g. four years at a public college
$
Emergency fund, childcare, care for a parent
What you already have
$
Including group coverage through work
$
Money your family could use (not retirement you'd keep)
Enter your values to see the result.
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How to use the Life Insurance Needs Calculator
Enter your income, how many years your family would need it and what share of it they would need.
Add debts and final expenses, your mortgage balance, and education costs per child.
Enter what you already have: existing life insurance (including work coverage) and savings your family could use.
Optionally tick present value if you assume the payout would be invested at a modest return after inflation.
Press Calculate coverage to see the recommended additional coverage and how it was built.
The DIME formula
Coverage needed = Debts + Income × years + Mortgage + Education − existing insurance − usable savings
D – Debts: credit cards, car loans, student and personal loans, plus final expenses (funeral, medical bills, estate costs).
I – Income: the yearly income your family would lose, times the number of years they would need it. With the present-value option the calculator uses an annuity-due formula, I = A × [1 − (1 + r)−n] ÷ r × (1 + r), where r is the return after inflation.
M – Mortgage: the remaining balance, so your family can keep the home.
E – Education: expected cost per child times the number of children.
Worked example
Income $75,000, replaced for 10 years; debts $15,000 and final expenses $15,000; mortgage $220,000; two children at $100,000 each; existing coverage $100,000 and savings $30,000:
Part
Calculation
Amount
Debts + final
$15,000 + $15,000
$30,000
Income
$75,000 × 10
$750,000
Mortgage
balance
$220,000
Education
2 × $100,000
$200,000
Total needs
$1,200,000
Already covered
$100,000 + $30,000
−$130,000
Additional coverage
$1,070,000 (about 14× income; shop for $1.1 million)
Tips for choosing the amount
Match the term to the need: a 20-year term often covers the years until children finish school and most of a mortgage.
Include a stay-at-home parent: replacing childcare and household work costs real money even without a salary. Enter that cost as income or other needs.
Do not count retirement accounts your spouse will need for their own retirement as available savings.
Revisit after big changes: a new child, a home purchase, a large raise or paying off the mortgage all change the answer.
Social Security survivor benefits can cover part of the income need for children under 18; check your estimate at ssa.gov if you want to lower the figure.
Frequently asked questions
How much life insurance do I need?
A needs-based estimate adds up what your family would have to pay without you: debts and final expenses, several years of income, the mortgage balance and education costs, then subtracts existing coverage and savings. For many families the result lands between 8 and 15 times income, but it varies widely.
What is the DIME method?
DIME stands for Debt, Income, Mortgage and Education. You add non-mortgage debts plus final expenses, your income multiplied by the years your family would rely on it, the remaining mortgage, and the cost of your children's education. The total is the coverage target before subtracting what you already have.
How many years of income should I replace?
A common choice is the number of years until your youngest child is financially independent, or until your spouse reaches retirement. Ten years is a frequent default; families with young children often use 15 to 20.
Is the 10 times income rule enough?
It is a quick benchmark only. Someone with a large mortgage and young children may need much more, while a person with no dependents and few debts may need far less. A needs-based calculation is more accurate.
Should I count my work life insurance?
Yes, but carefully. Group coverage through an employer usually ends when you leave the job, so many people treat it as a bonus rather than relying on it for the long term.
What does the present value option do?
A lump sum that is invested can pay out more than its face value over time. With the option on, the income part is reduced to the amount that, earning the return after inflation you enter, would fund the yearly income for the chosen years. Using 0% to 2% keeps the estimate cautious.
Term or whole life insurance?
Needs that end, like income replacement until children grow up or a mortgage, are usually covered more cheaply with term insurance matched to that period. Permanent policies cost much more for the same death benefit and serve different goals such as estate planning. Compare quotes from licensed agents.
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