Why not just use "10x my income"?

A flat multiple is a fast rule of thumb, but it ignores your actual situation — someone with a paid-off house and no kids needs very different coverage than someone with a large mortgage and two young children. DIME accounts for the specific obligations a payout would need to clear, which is why it tends to be more accurate for households with debt or dependents.

Does this calculator give me a premium quote?

No — it estimates how much coverage to shop for, not what it costs. Actual premiums depend on age, health, smoking status, policy length, and the specific insurer's underwriting, none of which a formula can replicate. Use the coverage number here when you request real quotes.

Insurance & Risk

Term Life Insurance Needs Calculator

How much coverage your family would actually need, using the DIME method \u2014 debt, income replacement, mortgage, and education, minus what you already have.

Formula reviewed against the Human Life Value method for term life coverage estimation · Last checked Aug 2026 · methodology

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Formula

The DIME method

Need = D + I + M + E − Existing resources

D — DebtNon-mortgage debt to pay off: credit cards, car loans, personal loans

I — Income replacementAnnual income \u00d7 years your family would need support

M — MortgageRemaining mortgage balance to pay off

E — EducationFuture education cost \u00d7 number of children

Existing resourcesCurrent savings plus any life insurance you already hold

FAQ

Common questions

DIME stands for Debt, Income replacement, Mortgage, and Education — four buckets of financial obligation a life insurance payout is meant to cover. Add them up, subtract savings and any existing coverage you already have, and what's left is a reasonable coverage target. It's one of the most widely used needs-analysis frameworks in financial planning, more detailed than a flat income multiple.

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