Life Insurance Calculator
Estimate how much life insurance coverage you need using the DIME method — free, instant, no email or signup required.
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Uses the DIME method (Debt, Income, Mortgage, Education) — the approach most financial advisors use for a quick, defensible estimate. Not financial or insurance advice.
How much life insurance do you actually need?
There is no single "right" number, but the DIME method is the most widely used shortcut among financial advisors because it is simple, defensible and covers the four biggest financial gaps your family would face: Debt, Income, Mortgage and Education.
- Debt: everything except the mortgage — credit cards, car loans, student loans, personal loans — that your family would otherwise have to pay off.
- Income: your annual income multiplied by the number of years your family would need it replaced (commonly until the youngest child turns 18, or until retirement).
- Mortgage: the remaining balance, so your family can stay in the home without that monthly payment.
- Education: an estimate of future college or trade-school costs per child.
From that total, subtract any existing life insurance (through work or a private policy) and liquid savings your family could draw on. What's left is a reasonable estimate of the additional coverage to shop for.
DIME vs. the "10x income" rule of thumb
A common shortcut is "buy 10x your annual income." It's easy to remember but ignores debt, mortgage size and number of children — DIME usually gives a more accurate (and often higher) number for homeowners with a mortgage and kids, and a lower one for renters without debt.
Term vs. whole life insurance
Term life covers you for a fixed period (10, 20, 30 years) at a much lower premium — it's what most people use to cover the "DIME gap" while debts get paid down and kids grow up. Whole life lasts your entire life and builds cash value, but costs 5-15x more for the same coverage. For pure income-replacement needs, term is usually the better fit; a licensed advisor can help you decide.
Planning the rest of your budget? See the mortgage calculator, retirement calculator or 401(k) calculator.
How to use it
- Enter your non-mortgage debt and remaining mortgage balance.
- Enter your annual income and how many years you want it replaced.
- Add children and estimated education costs, then subtract existing coverage and savings.
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Frequently asked questions
How much life insurance do I need?
A common starting point is the DIME method: add your non-mortgage debt, remaining mortgage balance, income multiplied by the years you want it replaced, and estimated education costs for your children, then subtract existing coverage and savings.
What is the DIME method?
DIME stands for Debt, Income, Mortgage and Education — the four categories added together to estimate how much life insurance coverage a family needs.
Is 10 times my salary enough life insurance?
It depends. The '10x income' rule ignores your mortgage balance, other debt and number of children, so it can under- or over-estimate your real need. DIME usually gives a more personalized number.
Should I get term or whole life insurance?
Term life insurance is cheaper and covers a fixed period, making it a common fit for replacing income while you have a mortgage or young children. Whole life costs more but lasts a lifetime and builds cash value. A licensed advisor can help you choose.
Does this calculator give me an exact quote?
No. It estimates a reasonable coverage amount using the DIME method; your actual premium depends on your age, health, the insurer and the policy type. This is not financial or insurance advice.
Do I need life insurance if I don't have kids?
Possibly less, but if you have debt, a mortgage, or a partner who depends on your income, some coverage can still protect them from those financial obligations.