Calculate how much life insurance your family actually needs using three industry-standard methods: DIME, 10x income rule, and Human Life Value.
DIME Method: Coverage = (Annual Income x Years) + Debts + Mortgage + Education - Savings 10x Income Rule: Coverage = Annual Income x 10 - Liquid Savings Human Life Value: Coverage = Annual Income x 30 x 0.70 - Liquid Savings (approximate 70% of gross income, 30-year working horizon)
A common rule of thumb is 10-12x your annual income, but the DIME method -- Debt + Income replacement + Mortgage + Education costs -- gives a more precise figure tailored to your situation.
DIME stands for Debt, Income, Mortgage, and Education. You add up all your debts, the income your family would need to replace (times the years until your youngest child is independent), your remaining mortgage balance, and future education costs for your children.
Yes. Assets your family could liquidate -- savings, investments, existing life insurance -- reduce the amount of new coverage you need. The calculator automatically subtracts your liquid savings from the total.
The coverage amount calculation is the same regardless of policy type. Term life is usually the most cost-effective way to get a large death benefit during your highest-need years.
Human Life Value (HLV) estimates coverage by projecting your total future earnings, discounted to present value. It typically results in higher coverage recommendations than the 10x rule but accounts for your full economic contribution to your family.
Income to replace. A common approach multiplies your annual income by the number of years your dependents would need support. Enter your income and that horizon to size the income-replacement portion.
Debts and future costs. Add your mortgage, other debts, and major future obligations like children's education so the benefit covers what you would leave behind.
Existing coverage and savings. Subtract life insurance you already have and liquid savings, since those reduce the gap a new policy needs to fill.
The result is a coverage target — the death benefit that would replace your income and clear your obligations — not a premium. Think of it as the gap between what your family would need and what they already have. Once you have the number, use the life insurance calculator to estimate what that amount of term coverage would cost each month, and adjust the horizon if the premium is more than you can sustain.
This is an educational estimate, not financial advice. Simple multiples can over- or under-state need depending on your family's circumstances, and it does not model inflation, investment returns on the benefit, or changing expenses over time. For a tailored figure, a fee-only financial planner can refine it. Revisit the number after major life events.
DIME sums Debt, Income replacement, Mortgage, and Education costs to estimate need. It is more thorough than a simple income multiple because it accounts for specific obligations.
Yes. Count employer group life and any individual policies you already hold, along with liquid savings, since those reduce the additional coverage you need to buy.
Revisit your number after major life events — a new child, a home purchase, a raise, or paying off debt — since each changes how much protection your family needs.
Often yes. A stay-at-home parent provides childcare and household work that would be costly to replace, so coverage on both partners is worth considering.
Turn your target into a price with the life insurance calculator, and read how to use your needs results, how much life insurance do I need, what is a beneficiary, and life insurance for parents.
Coverage recommendations use three established actuarial frameworks: the DIME method (Debt + Income + Mortgage + Education), the 10x income heuristic, and a simplified Human Life Value model. Inputs and weights are benchmarked against published LIMRA and NAIC industry data updated for 2026.
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