Life Insurance Calculator: How Much Do I Need?
Estimate how much life insurance you need with the DIME method: debts, income to replace, mortgage and education, minus your savings and current cover.
| D Β· Debts (not the mortgage) | |
|---|---|
| D Β· Funeral and final expenses | |
| M Β· Mortgage balance | |
| E Β· Children's education | |
| Total needs | |
| Savings and investments | |
| Life insurance you already have | |
| Life insurance you need |
What it does
The DIME method adds up what your family would need if you died: Debts and final expenses, Income for a number of years, the Mortgage and children's Education. From that total it subtracts savings and life insurance you already have. It is a starting point; an advisor can also account for inflation, investment returns and your partner's income.
How to use it
- Type your annual income and how many years your family would need it.
- Add your debts, mortgage balance, education costs and final expenses.
- Subtract your savings and current insurance and see the cover you need.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
How much life insurance do I need?
With 60,000 of income for 10 years, 10,000 of debts, a 250,000 mortgage, 100,000 for education and 15,000 of final expenses, the needs are 975,000. Minus 50,000 of savings and 100,000 of insurance: 825,000.
Is 10 times my income enough?
It is a quick rule of thumb. It ignores your mortgage, debts and children, so the DIME method is usually closer to what your family would really need.
How long should a term life policy last?
Usually until the mortgage is paid off and your youngest child is independent, often 20 to 30 years.
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