This life insurance needs calculator uses the DIME method — Debt, Income, Mortgage, Education — to estimate how much coverage would protect your family. Enter your numbers to see a recommended amount.
How the DIME Method Works
DIME adds up the four things a policy should cover if you were gone: Debt (credit cards, loans, final expenses), Income (annual income multiplied by the years your family would need it replaced), Mortgage (the remaining balance so your family can stay in the home), and Education (expected school or college costs). We then subtract savings and coverage you already have.
Worked Example
Someone earning $60,000 who wants 10 years of income replaced, with $15,000 in debt, a $250,000 mortgage, $100,000 of future education costs, and $50,000 in savings needs roughly: 15,000 + 600,000 + 250,000 + 100,000 − 50,000 = $915,000 in coverage.
Choosing Your Numbers
- Years of income: a common choice is enough to reach when your youngest child becomes independent.
- Mortgage: use the current payoff balance, not the original loan amount.
- Existing coverage: include any employer-provided life insurance in the savings figure.
DIME is a solid starting estimate. Your actual needs may differ based on a spouse’s income, other assets, and long-term goals.