How this calculator works
DIME adds up Debt (plus final expenses), Income to replace for a number of years, the Mortgage balance, and Education costs for each child. Your savings and existing coverage come off the total, and the result is rounded up to the nearest $50,000.
Worked example
With the example values below: Coverage to buy, $1,250,000 (total need $1,370,000 before existing resources). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Debts other than mortgage | $25,000 |
| Annual income to replace | $85,000 |
| Years to replace it | 10 yrs |
| Mortgage balance | $280,000 |
| Children | 2 |
| College cost per child | $100,000 |
| Final expenses | $15,000 |
| Resources you have | |
| Savings & investments | $60,000 |
| Existing life insurance | $100,000 |
How much coverage you need
The DIME method adds up debts, income to replace, the mortgage and education costs, then subtracts savings and existing coverage. A simpler rule of thumb is 10 to 12 times your income, but it ignores your actual debts and family needs.
If no one depends on your income, you may need little or no life insurance. Parents of young children and people with a mortgage and one main income usually need the most.
Term vs. permanent life insurance
Term life covers a set period, such as 20 or 30 years, and is far cheaper: a healthy 35-year-old can often get $500,000 of 20-year coverage for roughly $25 to $35 a month. Permanent policies, such as whole and universal life, last for life and build cash value, but cost many times more.
For most families, term coverage that lasts until children are independent and the mortgage is paid off is enough.
Buying a policy
- Compare quotes from several insurers; prices vary widely.
- Buy while you're young and healthy for the lowest rates.
- Check whether employer coverage, often one or two times salary, would end if you leave.
- Name primary and contingent beneficiaries and keep them current.
Frequently asked questions
How much life insurance do I need?
Enough to cover debts, replace income for the years your family needs it, pay off the mortgage and fund education, minus savings and existing coverage. Many families land at 10 to 12 times income.
What is the DIME method?
Debt, Income, Mortgage and Education: add up debts and final expenses, the income to replace, the mortgage balance and education costs, then subtract assets and existing coverage.
Is term or whole life insurance better?
Term is better for most people: it's much cheaper and covers the years when others depend on your income. Whole life can suit estate planning or lifelong dependents.
How much does life insurance cost?
It depends on age, health, term and amount. A healthy 35-year-old might pay roughly $25 to $35 a month for $500,000 of 20-year term coverage.
Is employer life insurance enough?
Usually not. It's often one or two times salary and typically ends when you leave the job.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.