Life Insurance Calculator (DIME Method)
Estimate how much life insurance your family would actually need with the DIME method: debts, income replacement, mortgage, and education, minus the coverage and savings you already have. You get the coverage gap and a suggested policy size rounded to the bands insurers actually sell.
Credit cards, car loans, student loans, personal loans
Gross income your household would lose
Often until the youngest child is independent
What's left on the loan today
A common planning figure for a 4-year degree
Work coverage plus any policies you own
Cash and investments your family could tap
Total need (DIME)
$1,115,000
debts + income years + mortgage + education
Coverage gap
$985,000
after the $130,000 you already have
Suggested coverage
$1,000,000
gap rounded up to the next $50,000 band
How the estimate adds up
| Component | Amount |
|---|---|
| Debts (non-mortgage) | $25,000 |
| Income: $65,000 × 10 years | $650,000 |
| Mortgage balance | $240,000 |
| Education: $100,000 × 2 children | $200,000 |
| Total need | $1,115,000 |
| Minus existing coverage | −$100,000 |
| Minus liquid savings | −$30,000 |
| Coverage gap | $985,000 |
An educational estimate, not a quote or a recommendation. Needs change with every birth, move, raise, and payoff, so it's worth rerunning once a year.
What each DIME letter covers
The method walks through the four things a death benefit typically has to do. Debt: clear every non-mortgage balance (cards, car loans, student loans) so payments die with the debt. Income: replace the lost paycheck for a chosen number of years, often until the youngest child is independent. Mortgage: pay off the house so the family's biggest bill disappears. Education: fund a planning figure per child for college or training. Then subtract what already exists: current policies plus savings with real liquidity, since money your family can actually reach reduces the amount insurance has to provide.
A worked family example
Picture one earner making $65,000 with a stay-at-home partner and two kids: $25,000 of car and card debt, ten years of income ($650,000), a $240,000 mortgage, and $100,000 of education per child ($200,000). The DIME total is $1,115,000. Subtract $100,000 of group coverage at work and $30,000 of savings, and the gap is $985,000, which rounds up to a suggested $1,000,000 policy. That number sounds enormous, but the premium on level term coverage for a healthy applicant is usually far smaller than people expect, which is exactly why it's worth running the math instead of guessing. Whoever you insure, name your beneficiaries directly and keep them current: the payout follows the form, not the will.
Term versus whole, framed honestly
Most family needs in the example above are temporary: the mortgage amortizes, the kids launch, retirement savings grow. Term life insurance matches that shape, covering a fixed window at a low cost. Whole life lasts forever and builds cash value, but costs several times more for the same death benefit, which tempts people into buying less coverage than they need. This tool sizes the need; the product choice is a separate, personal decision.
Two people, two estimates
Run the calculator once per adult, including a stay-at-home parent: replacing childcare, driving, and household management can easily cost several thousand dollars a month, so enter that replacement cost as the income to cover. And remember insurance handles the catastrophic case while an emergency fund handles the ordinary ones; the emergency fund calculator sizes that companion number.
Frequently asked questions
What is the DIME method?
DIME stands for Debt, Income, Mortgage, and Education. You add your non-mortgage debts, your annual income times the years your family would need it replaced, your remaining mortgage balance, and expected education costs per child. Subtract existing coverage and liquid savings, and what's left is your coverage gap.
How much life insurance do most people need?
A common shortcut is 10 to 12 times annual income, and for many families a DIME estimate lands in a similar range. DIME is usually more useful because it reflects your actual mortgage, debts, and kids rather than a flat multiple. Either way, most people are surprised that the estimate for a family with a house and children often approaches or passes a million dollars.
What's the difference between term and whole life insurance?
Term insurance covers you for a set period, often 20 or 30 years, and costs a small fraction of whole life for the same death benefit. Whole life lasts your entire life and builds cash value, but premiums are far higher. Most families' biggest needs, like a mortgage and young kids, are temporary, which is why term fits most situations. This calculator estimates the coverage amount, not which product to buy.
Does a stay-at-home parent need life insurance?
Usually yes. A stay-at-home parent's work, including childcare, transportation, and running the household, would cost real money to replace, often several thousand dollars a month. Run the calculator using the cost of replacing that work as the income figure, even though no paycheck exists today.
Is the life insurance from my job enough?
Employer coverage is typically 1 to 2 times salary, while a DIME estimate for a family with a mortgage and kids often runs 10 times salary or more. Workplace coverage also usually ends when the job does. Many people treat it as a supplement and hold their own term policy that follows them between employers.
Does this calculator save my numbers?
No. Everything runs in your browser and nothing you type is stored or sent anywhere.
Want this to update itself?
Stoia connects your real accounts and keeps the full picture current: net worth, budgets, and goals. Launching in 2026.