Life Insurance Calculator
Estimate how much life insurance coverage your family needs using the DIME method — debts, income, mortgage and education, minus savings you already have.
Reviewed by the CalcCafe editorial team · Last updated 1 July 2026 · How we test our tools
Example
A family with $20,000 in debts, a $60,000 income to replace for 10 years ($600,000), a $200,000 mortgage, and $100,000 of future education costs has $920,000 in total obligations. Subtracting $30,000 in existing savings leaves a coverage need of about $890,000.
How it works
The DIME method adds four needs and subtracts what you already have: coverage = max(0, Debts + Annual income × Years + Mortgage + Education − Savings). Income replacement equals your annual income multiplied by the number of years your family would need it.
Good to know
DIME stands for Debts, Income, Mortgage, and Education — the four money buckets a life insurance policy is meant to cover if a breadwinner dies. Rather than pulling a round "10× salary" figure out of the air, this approach adds up the specific obligations your family would face, then subtracts the savings and assets they could already draw on, so the payout is sized to your real situation instead of a rule of thumb.
The largest piece is usually income replacement. Pick a number of years that reflects how long your household would lean on that paycheck — until young children are grown, until a mortgage is paid off, or until a surviving partner could rebuild earnings. Ten to twenty years is common, but a family with toddlers may want more than one with teenagers heading to work. The mortgage and other debts field clear the balance sheet, while the education bucket sets aside tuition or childcare a survivor would otherwise have to fund alone.
Subtracting current savings, retirement accounts, and any existing coverage keeps you from over-buying. If the number looks large, remember that term life insurance is inexpensive relative to the coverage it provides, and that a single policy can be split across shorter and longer terms to match when each obligation disappears. It is fine to round up for a margin of safety.
Treat the result as a planning estimate, not personalized advice. It does not account for inflation, investment returns on the payout, Social Security survivor benefits, taxes, or an employer group policy you may already hold. Revisit the figure after major life events — a new child, a home purchase, a raise, or paying off debt — and confirm specifics with a licensed agent or fee-only financial planner.
Frequently asked questions
What is the DIME method for life insurance?
DIME is a way to size coverage by adding four needs — Debts, Income replacement, Mortgage, and Education — then subtracting savings and assets you already have. It ties the amount to your actual obligations rather than a flat multiple of salary.
How many times my salary should I insure?
A common shortcut is 10–15× annual income, but the DIME method is more precise because it counts your real debts, mortgage, and education goals. Use this calculator to compare the two and pick a figure you are comfortable with.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser. Your inputs never leave your device, and it works offline once loaded.
Is this calculator free?
Yes, completely free with no sign-up and no limits.
People also ask
How much life insurance do I need?
Add your outstanding debts, the income you want to replace (annual income times the number of years), your mortgage balance, and expected education costs, then subtract current savings. The remainder is a solid estimate of the coverage a policy should provide.
Does life insurance need include the mortgage?
Yes — under the DIME method the full remaining mortgage balance is included so the payout can clear the home loan and let survivors stay in the house without that monthly payment.
Should I subtract savings from my life insurance need?
Yes. Existing savings, retirement accounts, and any current coverage reduce the gap a new policy has to fill, so subtracting them prevents you from paying premiums for more insurance than your family actually needs.
Related calculators
Sources & references
Estimate for planning only — not insurance or financial advice. Confirm coverage with a licensed agent or fee-only planner.
These tools follow our methodology and provide educational estimates only — verify important figures with a qualified professional.