Life Insurance Needs Calculator — How Much Coverage Do You Need?
Life insurance exists to replace what your income and presence provide for your dependents. Rather than guessing a round number, this calculator uses the DIME method — Debt, Income replacement, Mortgage, Education — minus what you've already saved, to estimate coverage that actually fits your family's needs.
A general planning framework, not personalized financial or insurance advice — consult a licensed insurance advisor for your specific situation.
How to use this tool
- Enter your annual income and how many years of it your family would need replaced (common range: 10-20 years, or until the youngest child is independent).
- Add outstanding debts, remaining mortgage balance, and future education costs you'd want covered.
- Subtract existing savings and any life insurance you already have.
- Press Calculate to see the recommended additional coverage amount.
Frequently asked questions
What is the DIME method?
A structured way to estimate life insurance needs: Debt (non-mortgage debts), Income (years of income replacement your family needs), Mortgage (remaining balance), Education (future schooling costs) — summed up, then reduced by existing savings and coverage.
Is 10x my income enough life insurance?
The '10x income' rule of thumb is a reasonable starting point but ignores your specific debts, mortgage and number of dependents. A family with a large mortgage and young children usually needs meaningfully more than a simple income multiple — DIME gives a more tailored number.
Term life or whole life insurance?
Term life covers a fixed period (e.g. 20 years) at a much lower premium — ideal for covering the years your kids are dependent or your mortgage is outstanding. Whole life covers your entire life and builds cash value, but costs far more per dollar of coverage. Most people needing pure protection are better served by term life, using the savings to invest separately.
Do stay-at-home parents need life insurance?
Often overlooked, but yes — replacing childcare, housekeeping and household management has a real cost if a stay-at-home parent dies, even without a salary. Many families underestimate this and only insure the earning spouse.