How much coverage your family actually needs — DIME method, priced in term quotes
| DIME component | Amount |
|---|
Life insurance has one honest question — if your income vanished tomorrow, what would your family need to be financially okay? — and an industry keen to answer it with products instead of math. This calculator runs the standard DIME method (Debts, Income, Mortgage, Education), subtracts what you already have, and then prices the answer in level-term quotes, because the second-biggest surprise in life insurance is how much you need and the biggest is how little it costs.
| Component | What to count |
|---|---|
| Debts | Cards, car loans, personal/student loans (private ones survive death), plus ~$15k final expenses |
| Income | Annual income × years until the family is self-sufficient — 20 years with toddlers, 5–10 with teens or a high-earning spouse |
| Mortgage | Payoff balance — a paid-off home transforms the survivor's budget |
| Education | ~$120k per child for in-state college (see the College Cost tool) |
Then subtract existing coverage (employer group life — typically 1–2× salary — and any policies) and liquid savings. The 10×-income rule of thumb usually lands nearby; DIME just shows the why.
| 20-year term, $750k, preferred health | Monthly |
|---|---|
| Age 30 | ~$35–45 |
| Age 35 | ~$45–60 |
| Age 40 | ~$70–95 |
| Age 50 | ~$180–250 |
Term is cheap because most people outlive it — which is the point: you're buying the two decades when a death would be financially catastrophic, then self-insuring via the wealth you built meanwhile. Price rises ~8–10%/yr of age, so the best day to buy is always today's.
Whole/universal life costs 8–15× more per dollar of coverage in exchange for a cash-value component whose returns, after fees and commissions, rarely beat buying term and investing the difference in index funds. Legitimate permanent-insurance uses exist — estate-tax liquidity (ILITs), special-needs dependents, business buy-sell agreements. For income replacement — this calculator's job — level term wins, and anyone selling you whole life for it is selling their commission.
It's a decent default that DIME refines: young families with mortgages and future college often need 12–15×; older families with assets and independent kids, 5× or none. Run the components — the rule is a checksum, not an answer.
For income replacement: term, almost categorically — same protection at 8–15× lower cost, with the difference invested. Permanent insurance is a specialty tool for estate and special-needs planning, not a savings account with a death benefit.
Yes, subtract it — but don't lean on it: typical group coverage is 1–2× salary, disappears when you leave, and post-employment conversion is expensive. Own the core coverage personally and portably.
Shop harder, not less — carriers underwrite conditions differently (diabetes-friendly, cardiac-friendly insurers exist), and brokers know which. Even rated policies beat no coverage; guaranteed-issue is the last resort for small final-expense amounts.
When DIME reaches zero: kids independent, mortgage gone, portfolio sufficient for the survivor (the Retirement Savings tool answers that). Many term buyers simply let the policy lapse at that crossover — as designed.
Financially, no — insurance replaces income and obligations, which children don't have. Child riders ($5-10k, a few dollars) for final expenses are reasonable; whole-life policies 'for their future' are commission vehicles.
Yes — every figure computes locally in your browser.
Run DIME once, buy the level term that closes the gap, and set a calendar note to reassess at each life event. Few $50 monthly bills buy more peace of mind — or are put off longer by people who'd never skip car insurance.