Life Insurance Needs Calculator
Determine how much life insurance coverage you need based on your income, debts, dependents, and how many years of support they'd need.
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Recommended Coverage Amount
Life insurance replaces your income and covers obligations if you pass away.
DIME Method:
- Debt: Total outstanding debts (mortgage, loans, credit cards)
- Income: Annual income × years of replacement needed
- Mortgage: Remaining mortgage balance (if not in debt total)
- Education: College costs for children
Simplified formula used here:
Coverage = (Annual Income × Years Needed) + Total Debts + ($50,000 × Dependents for education/care)
Rules of thumb:
- 10-12× annual income is a common starting point
- Add outstanding debts
- Add $50,000-$100,000 per child for education
- Subtract existing savings and coverage
Types of life insurance:
- Term life: Cheapest, covers a set period (20-30 years)
- Whole life: More expensive, builds cash value, lasts your lifetime
Tip: Most families are significantly underinsured. Review coverage after major life events (marriage, children, home purchase).