Life Insurance Needs Estimator
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$0.00
Total Life Insurance Coverage Needed
Income Replacement Portion$0
Debt Coverage$0
Education Funding$0
Final Expenses$0
Minus Current Savings/Insurance$0
Recommended Term Length--
Coverage Gap--
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How to Use the Life Insurance Calculator
Enter your annual income and the number of years to replace. Enter total outstanding debts, estimated future college cost per child, number of children, final expenses, and current savings and existing insurance. The calculator applies the DIME method as a cross-check.
Life Insurance Needs Formula
Total Need = (Income × Years × 75%) + Debts + (College Cost × Children) + Final Expenses − Savings
The 75% factor accounts for reduced expenses for the surviving family. The DIME method is: Debts + (Income × 7) + Mortgage + Education.
Frequently Asked Questions
A common rule of thumb is 10-12 times your annual income, but the right amount depends on your specific situation. The needs-based approach used in this calculator provides a more accurate estimate.
DIME stands for Debts, Income, Mortgage, and Education. This quick method suggests adding up all your debts plus 7 years of income plus your mortgage balance plus estimated education costs.
Term life insurance is generally recommended for most people because it provides affordable coverage for the period when your dependents need it most (20-30 years). Whole life is significantly more expensive.
Income replacement means providing enough insurance so the death benefit can generate ongoing income. A common approach is to replace 75% of your income for a set number of years.