PolicyDecoded

Life Insurance Calculator

Not sure how much life insurance you need? This free calculator uses the proven DIME method — Debt, Income, Mortgage, and Education — to estimate the coverage that would keep your family financially secure.

Life Insurance Needs Calculator

Based on the DIME method (Debt, Income, Mortgage, Education)

$

Pre-tax income to replace

Until kids are grown / spouse retires

$

Amount still owed on your home

$

Car loans, credit cards, student loans

For education costs

$

Estimated cost per child

$

Funeral and end-of-life costs

$

Assets your family could use

$

Coverage you already have

Recommended Coverage

$1,005,000

A common rule of thumb. Your needs may vary.

Income replacement$600,000
Mortgage$200,000
Other debts + final expenses$30,000
Children's education$200,000
Minus current savings & coverage−$25,000
Total recommended$1,005,000

How the DIME method works

The DIME method is a simple, widely used way to size a life insurance policy. It adds up the four biggest financial obligations your family would face if you passed away, then subtracts the assets they already have:

  • D — Debt: Credit cards, car loans, student loans, plus final expenses.
  • I — Income: Your annual income multiplied by the number of years your family would need it replaced.
  • M — Mortgage: Your remaining home loan balance so your family can stay in the home.
  • E — Education: Estimated college costs for each child.

From that total, subtract your current savings and any existing life insurance to find the additional coverage you should consider. Many experts also suggest a quick sanity check: coverage of roughly 10–15× your annual income.

Why the right amount matters

Buying too little leaves your family exposed; buying far too much wastes money on premiums. The DIME method lands you in a realistic range. Once you have a target number, learn how much life insurance you really need, compare term vs. whole life insurance, and see how a no-exam policy could get you covered quickly.

Next step: get a real quote

A calculator gives you a target — the only way to get your true price is to compare quotes from several insurers. Term life is often more affordable than people expect, especially if you're young and healthy.

This calculator provides general estimates for educational purposes only and is not financial advice. Consider speaking with a licensed insurance professional about your specific situation.