Calculate how much coverage your family actually needs with the DIME method — debts, income, mortgage, and education.
Free DIME-based planner that adds your debts, income replacement, mortgage, and education costs, subtracts existing coverage, and shows the exact policy size to buy.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Use the DIME method — typically 10–15x your income.
The DIME method totals four real obligations: Debts, Income replacement, Mortgage, and Education for your kids. For most working parents with a mortgage and young kids, the answer lands between 10x and 15x annual income — much higher than employer-provided coverage alone.
It is a starting point, not a final answer.
10x income is a fast rule of thumb, but it ignores mortgage size, number of kids, and existing debt. DIME usually lands higher for parents with a mortgage and lower for single, debt-free earners. Run both and use the larger of the two.
Term, for almost everyone solving the "need" question.
Term life is cheap, simple, and lasts as long as your dependents need protection. Whole life mixes insurance with a slow-growing investment, costs 8–12x more per dollar of coverage, and is rarely the right tool for replacing income.
Usually yes — employer coverage is small and not portable.
Group life is typically 1–2x salary and disappears the day you leave the job. For a family with a mortgage and young kids, that's usually a fraction of true need. Treat it as a bonus on top of an individual term policy.
The mechanics in short answers — no jargon, no upsell.
Multiply annual income by the years of replacement (10–20 is common). This is the largest single bucket for most working parents.
A surviving partner should not be juggling a mortgage, car loan, and student debt on one income. Add the full balances to the policy.
A four-year degree is the most common goal. Estimate per-child cost in today's dollars and multiply by the number of kids.
Add $10–20k for final expenses, then subtract whatever you already have from employer or individual policies. The gap is what you actually need to buy.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Replace 10–20 years of your paycheck so your family keeps the same lifestyle.
Debts, Income, Mortgage, Education — the four buckets every honest calculator should sum.
See the rule-of-thumb number next to your real DIME total in one screen.
Subtract any existing employer or individual policy to see what you still need to buy.
A realistic term-life premium estimate based on coverage size — no quote forms.
Pick the years of income to replace — usually until kids are independent or the mortgage ends.
Everything you might ask before, during, or after using this tool.
DIME stands for Debts, Income, Mortgage, and Education. You add the four numbers to estimate your total life insurance need, then subtract existing coverage to find the gap. It's more accurate than a simple income multiple because it accounts for your actual obligations.
10x income is a quick screen but ignores mortgage size, debt load, and number of children. For most parents with a mortgage and kids under 10, DIME comes out higher. For single earners with no dependents, DIME is often much lower. Use the higher of DIME and 10x.
A common answer is "until your youngest child is financially independent." For parents of young kids, that's often 15–20 years. For parents of teens, 5–10 years may be enough. Pair the number with the years remaining on your mortgage as a sanity check.
Usually no. If no one relies on your income — no spouse, no kids, no aging parents you support — a small policy for final expenses is typically enough. Life insurance is income replacement; without dependents there is no income to replace.
Yes, indirectly. If your spouse earns enough to cover the family's needs alone, your "income to replace" number can be smaller. If both incomes are essential, both partners should typically carry policies sized to their own DIME total.
Match the term to the years you're replacing. A 30-year-old parent of newborns usually needs a 20- or 30-year term. A 50-year-old with a paid-off house and grown kids may not need new coverage at all.
It can — that's the "E" in DIME. The death benefit is a lump sum your family can invest and draw from for tuition. Add roughly the cost of a four-year degree per child, in today's dollars, to the total.
For solving the "need" calculated here, yes. Term life delivers the largest death benefit per dollar of premium, which is exactly what you want for income replacement. Whole and universal life products serve different goals (estate planning, forced saving) and cost much more.
Other Lazysmirk tools that pair well with this one.
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DIME is just four numbers added together. Debts you'd leave behind. Income your family needs to replace. Mortgage balance that still has to get paid. Education for your kids. Sum those four, subtract whatever life insurance you already have, and you have a real coverage target — not a rule of thumb.
The reason it works better than "10x income" is that it forces you to look at your actual financial life. A renter with no kids and a 30-year career ahead has a very different real number than a homeowner with two toddlers, even at the same income.
The 10x rule is a screening tool. It's good for a five-second answer at a dinner party. DIME is a planning tool. It's what you should actually buy from.
In practice, run both. If DIME is materially higher, trust DIME — you have obligations the rule of thumb doesn't see. If 10x is higher, your obligations are lighter than your income implies, and the larger number is still a safe ceiling. Either way, you want to be above the higher of the two, not below the lower.
A 30-year term policy for a healthy 35-year-old can be cheap — often $30–60/month for $1M of coverage. The same coverage in whole life can run $700–1,200/month, because most of the premium goes to a cash-value account, not the death benefit.
If your problem is "I need to make sure my family is fine if I die," term wins on math, simplicity, and flexibility. Whole life solves different problems — estate planning, lifelong coverage for special-needs dependents, certain business structures — that the DIME calculation doesn't address.
Group life through work is convenient and often free up to 1x salary, but it disappears the day you leave the job. For a parent with a 20-year horizon, that's a thin reed to lean on.
Use employer coverage as a bonus layer. Buy an individual term policy sized to your DIME number, owned by you, portable across jobs, and locked at today's rates and today's health.
Two short notes worth reading before you trust any number on this page.
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Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
