How much life insurance coverage do I need?

Common methods multiply annual income by a factor, or use the DIME method (Debt, Income, Mortgage, Education).

What is the DIME method?

It sums outstanding Debt, years of Income replacement, remaining Mortgage, and future Education costs.

Does this account for existing savings?

A thorough estimate subtracts existing savings/assets from the total need first.

Life Insurance Coverage Calculator

Get a starting estimate of how much life insurance coverage may fit your family's needs using the income-replacement method.

Annual Income ($)

Years of Income to Replace

Outstanding Debts ($)

Future Expenses (college, etc.) ($)

Existing Savings & Assets ($)

Income Replacement Needed-

Total Needs (Debts + Future + Income)-

Suggested Coverage Amount-

How Much Life Insurance Do You Need?

The income-replacement method is a common starting point: it estimates coverage based on how many years of income your family would need replaced, plus outstanding debts and future expenses, minus any assets already available.

Formula

Suggested Coverage = (Annual Income × Years to Replace) + Debts + Future Expenses - Existing Assets

How to Use This Calculator

Enter your annual income and how many years you'd want it replaced (often 10-20 years).
Enter outstanding debts (mortgage, loans) and any anticipated future costs like college tuition.
Enter existing savings or assets that could offset the need.

Example

A $60,000 earner wanting 10 years replaced, with $150,000 in debts, $50,000 in future college costs, and $20,000 in savings would need roughly $780,000 in coverage.

This is a general planning estimate, not financial or insurance advice - consult a licensed advisor for your specific situation.