Life Insurance Calculator
Estimate how much life insurance coverage you need with the DIME method: debt, income replacement, mortgage, and education.
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Frequently asked questions
- How much life insurance do I need?
- A common starting point is 10 to 15 times your annual income, but a needs-based estimate is more accurate. This calculator uses the DIME method, which adds your debts, income replacement, mortgage balance, and education costs, then subtracts your existing savings and current coverage to show a recommended amount.
- What is the DIME method?
- DIME stands for Debt, Income, Mortgage, and Education. You total your non-mortgage debts, the income your family would need to replace for a set number of years, your remaining mortgage balance, and any future education costs. Subtracting current savings and existing life insurance gives your estimated coverage gap.
- How many years of income should I replace?
- It depends on how long your dependents would need support. Many families choose the number of years until the youngest child is financially independent, or until a spouse reaches retirement. Ten years is a common default, but you can adjust it to match your situation in the calculator.
- Should I subtract my existing savings and coverage?
- Yes. Life insurance is meant to cover the gap between what your family needs and what they already have. Existing savings, investments, and any current life insurance policies reduce the additional coverage you need to buy, so the calculator subtracts them from the total.
- Is term or whole life insurance better for this estimate?
- This calculator estimates the total coverage amount, not the policy type. Term life insurance is usually the most affordable way to cover a large needs-based amount for a fixed period, while whole life adds a cash-value component at a higher cost. Compare quotes for the coverage amount this tool suggests.
- Are these results a guarantee of what to buy?
- No. This is a planning estimate only. Your actual life insurance needs depend on your family situation, tax rules, existing benefits, and goals. Confirm the amount and policy type with a licensed financial or insurance professional before purchasing.