How much life insurance do you need?
The most reliable way to size a policy is to add up what your family would actually need to replace, rather than guessing at a round number. This calculator uses the DIME method — Debt, Income, Mortgage, Education — a needs-based framework that financial planners commonly use as a starting point. It estimates the lump sum your family would need to stay financially stable without your income.
The DIME method explained
Debt: Add up credit cards, auto loans, student loans, and any other non-mortgage debt your family would otherwise have to pay off. Income: Multiply your annual income by the number of years your family would need it replaced — commonly 10, but longer if you have young children. Mortgage: Your remaining mortgage balance, so your family isn't forced to sell or refinance. Education: A rough estimate of future schooling costs per child. Add the four together, then subtract any existing life insurance and liquid savings to get your net coverage need.
Term vs. whole life insurance
Once you know your number, the next decision is policy type. Term life insurance covers a fixed period — usually 10, 20, or 30 years — and is the most affordable way to get a large amount of coverage while your income is most needed (young kids, an active mortgage). Whole life insurance lasts your entire life and builds cash value you can borrow against, but costs significantly more per dollar of coverage. Most people covering a DIME-style income-replacement need choose term, then revisit coverage as debts shrink and kids grow up.
When to reassess your coverage
A DIME estimate isn't a one-time number — recalculate it after a marriage, a new child, a new mortgage, a major income change, or paying off significant debt. Coverage needs typically peak in your 30s and 40s when income-replacement years and dependent costs are highest, then decline as your mortgage shrinks and kids become financially independent.
This calculator provides a general estimate for informational purposes only and is not financial, insurance, or legal advice. Insurance needs vary by individual circumstances — speak with a licensed insurance agent or financial advisor before purchasing a policy.
Frequently asked questions
How much life insurance do I need?
A common approach is the DIME method: add up your outstanding Debt, the Income your family would need replaced (usually 10 years' worth), your remaining Mortgage balance, and future Education costs for your kids. Subtract any existing coverage and liquid savings to get your estimated need.
What is the DIME method?
DIME stands for Debt, Income, Mortgage, and Education. It's a needs-based way to estimate life insurance coverage by adding up these four categories of financial obligation your family would face without your income, then subtracting existing coverage and savings.
What's the difference between term and whole life insurance?
Term life insurance covers you for a set period (10, 20, or 30 years) and is significantly cheaper for the same coverage amount. Whole life insurance lasts your entire life and builds cash value, but costs far more per dollar of coverage. Most people who need pure income protection choose term.
Do I need life insurance if I'm single with no kids?
If no one depends on your income, your need is much lower — typically just enough to cover debts, a mortgage, and final expenses so they don't fall on family members. Many single people with no dependents and no debt need little to no life insurance.
How much does life insurance cost?
Term life insurance is the most affordable option — a healthy 35-year-old can often get $500,000 of 20-year term coverage for $20–35/month. Cost depends on age, health, coverage amount, and term length. Whole life policies typically cost 5–15x more for the same coverage.
When should I buy life insurance?
The best time is while you're young and healthy, since rates rise with age and health issues. Common triggers to buy or increase coverage include getting married, having a child, buying a home, or becoming the primary income earner for your household.