Life Insurance Calculator

Calculate your life insurance coverage needs using the comprehensive DIME method (Debt, Income, Mortgage, Education). Account for income replacement, outstanding debts, future education costs, final expenses, and emergency fund needs.

Total Needs = (Income * Years) + Debt + Mortgage + Education + Final Expenses + Emergency Fund + Other. Net Need = Total Needs - Current Savings - Existing Coverage. Recommended Coverage = Net Need (rounded to nearest $50k)
$75,000 income * 10 years + $250,000 debt + $100,000 education + $15,000 final = $1,115,000 total needs. With $50,000 savings and $100,000 existing coverage: Net need = $965,000. Recommended coverage = $1,000,000 (~$50/month term premium)

How much life insurance do I need?

Common methods: 10x annual income rule (simple but often inadequate), Income replacement (replace 5-10 years of income), DIME method (Debt + Income + Mortgage + Education), or Human Life Value (future earnings discounted to present). Most families need $500,000-$1,000,000+. Consider: dependents, debt, income, savings, future expenses (college), funeral costs ($10,000), and existing coverage.

What is the difference between term and whole life insurance?

Term Life: Coverage for specific period (10, 20, 30 years), lower premiums, no cash value, expires worthless if you outlive term. Best for temporary needs like mortgage or young children. Whole Life: Permanent coverage, higher premiums, builds cash value, lasts lifetime. More expensive (5-15x term cost). Term is better for most people needing affordable protection.

How long should my life insurance term be?

Match to your longest financial obligation. Common terms: 20 years - until kids finish college, 30 years - until mortgage paid off and retirement, 10 years - short-term debt coverage. Consider: age of youngest child, years until retirement, mortgage payoff date, and when dependents become self-sufficient. You can have multiple policies with different terms.

What expenses should life insurance cover?

Essential coverage: Replace income for dependents (5-10 years), pay off mortgage and debts, funeral and final expenses ($10,000-$15,000), children's education costs, emergency fund for family (6-12 months expenses), childcare costs if stay-at-home parent dies. Don't forget: ongoing bills, healthcare costs, and future major expenses.

Do I need life insurance if I have no dependents?

Possibly not, if no one relies on your income. However, consider: final expenses (funeral, debts), co-signed loans (burden on co-signer), aging parents you support, desire to leave inheritance, or locking in low rates while young/healthy. Single people often need $50,000-$100,000 to cover debts and final expenses, not the full income replacement amount.

How does my age affect life insurance rates?

Age is a major factor. Rates increase 8-12% per year of age. A healthy 30-year-old pays $20-30/month for $500,000 term, while a 50-year-old pays $100-150/month for same coverage. Buy earlier for lower lifetime costs. Even if you don't need much coverage now, locking in rates in your 20s-30s saves thousands over time. Health also matters more as you age.