Life Insurance Calculator (DIME Method)
The DIME method sizes coverage from four real numbers: Debt, Income to replace, Mortgage, and Education. Enter yours to see the coverage gap — the policy size that would actually protect the people who depend on you.
| D — Debt | — |
| I — Income replacement | — |
| M — Mortgage | — |
| E — Education | — |
| Total need (DIME) | — |
| Coverage you already have | — |
Quick answer: A common answer is the DIME total: your Debt + Income (annual × years to replace) + Mortgage + Education costs, minus coverage you already have. For a household earning $60,000 with a mortgage and two kids, that often lands between $500,000 and $1,000,000 of term coverage.
How the DIME method works
Coverage need = Debt + (Income × Years) + Mortgage + Education − Existing coverage
DIME is the most widely used rule of thumb for sizing life insurance because it maps to the real bills your family would face:
- D — Debt: everything that doesn't disappear when you do — credit cards, car loans, student loans, co-signed debts. (Mortgage is counted separately as M.)
- I — Income replacement: your annual income times the number of years your dependents would need it. Pick "years until the youngest is independent," often 10–20.
- M — Mortgage: the outstanding balance, so the family keeps the home free and clear.
- E — Education: the cost of funding your children's schooling. A common placeholder is ~$100,000 per child for four years in-state, far more for private.
Add those four, subtract the coverage you already have (including any policy through work), and the remainder is roughly the additional term policy to shop for.
What DIME leaves out
- It ignores your savings and investments beyond the coverage you enter — if you have significant assets, your real gap may be smaller. It also ignores your surviving partner's income.
- It doesn't adjust for inflation or investment growth on the payout. A lump sum invested conservatively can stretch further than the raw math suggests.
- Employer coverage usually ends when the job does. If most of your existing coverage is group life through work, treat it as temporary and consider your own term policy.
Term life is what most families need — it's cheap and covers exactly the years your dependents rely on you. See the trade-off versus permanent policies on the term vs whole life calculator, and check your income-protection gap with the disability insurance calculator.
Frequently asked questions
How much life insurance do I need?
A common answer is the DIME total: your Debt + Income (annual × years to replace) + Mortgage + Education costs, minus coverage you already have. For a household earning $60,000 with a mortgage and two kids, that often lands between $500,000 and $1,000,000 of term coverage.
What does DIME stand for?
Debt, Income, Mortgage, Education — the four obligations life insurance is meant to cover. You add them up, subtract existing coverage, and the remainder is your approximate coverage gap.
Is the "10x income" rule good enough?
"10 times your income" is a fast starting point, but it ignores your specific debts, mortgage, and education costs. DIME is more accurate because it uses your actual numbers rather than a flat multiple.
Should I count my work life insurance?
Enter it as existing coverage, but remember employer group life usually ends when you leave the job and is often only 1–2× salary. Many people carry their own term policy on top so they are not left uninsured between jobs.
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Last updated: 2026-07-11