Life Insurance Calculator

How much life insurance do you actually need?

Life insurance is not about you. It is about the people who would be financially wrecked if your income disappeared. The right amount of coverage is the amount that lets your family stay in their home, keep their lifestyle, pay off debts, and reach their goals as if you were still there earning.

The DIME method

DIME is a simple framework used by financial planners for decades. Add up four numbers: Debt (credit cards, car loans, personal loans), Income (annual income times the number of years you want to replace it), Mortgage (the balance on your home), and Education (what it will cost to put your kids through school). Subtract any existing savings and any coverage you already have. What is left is a solid starting point for a term policy.

How many years of income?

Ten years is the classic rule of thumb, but the honest answer is "long enough for your family to become self-sufficient." If your kids are young, that might be 20 years. If your spouse could return to full-time work and your kids are near college, it might be five. Match the coverage window to the risk window.

Term is almost always right for income replacement

A 20-year or 30-year level-premium term policy is inexpensive, straightforward, and covers the exact period during which your family depends on your income. A healthy 35 year old can often buy $1 million of 20-year term for less than $40 a month. Permanent policies (whole life, universal life) cost 8 to 12 times more for the same death benefit and solve a different problem.

Do not forget the stay-at-home parent

If one parent stays home, that parent's economic contribution is real: childcare, meals, transportation, household coordination. Replacing those services costs money. Most planners recommend a meaningful policy on a stay-at-home parent as well, often in the $250,000 to $500,000 range depending on kids' ages.

Check what your employer gives you

Group life through work is usually 1x to 2x salary. That is not enough for most families, and it disappears if you leave the job. Treat it as a bonus, not the plan. Your own individual policy travels with you.

Revisit every few years

Your coverage need changes. When you have another child, buy a bigger house, or get a big raise, your need goes up. When you pay off the mortgage or the kids finish college, your need goes down. Coverage should follow the arc of your responsibilities.

The number this tool gives you is not a quote. It is a target. Get real quotes from a few carriers, compare 20 and 30 year terms, and buy the coverage that lets you sleep at night.