Phase 9 · Family & Protection
Term Life Insurance Needs Calculator
Not a sales pitch — a number. Size your coverage with the DIME method: debts, income replacement, mortgage and education, minus what you already have, so you buy exactly enough.
Under the hood
The math, fully exposed
The DIME method adds your obligations, then subtracts what's already covered:
Income replacement = annual income × years to replace
Obligations = debts + mortgage + future education
Coverage need = income replacement + obligations − (savings + existing coverage)
Multiple of income = coverage need ÷ annual income
- It's a shortfall, not a jackpot: coverage replaces what your income and presence would have provided — sized to obligations, not maximized.
- Subtracting assets prevents overbuying: every dollar already saved or insured is a dollar of premium you don't need to pay.
- The need shrinks over time: as debts fall and savings grow, future-you needs less — which is exactly why temporary term coverage fits.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
How much life insurance do I need?
Enough to replace what your death would cost the people who depend on you. The DIME method sizes it from four things: Debts you would leave behind, Income your family needs replaced for some years, Mortgage payoff, and Education costs for children — then subtract assets and existing coverage you already have. The popular "10× income" rule is a quick shortcut; DIME is more precise because it reflects your actual obligations.
Why term insurance instead of whole life?
Term life covers you for a set period (say 20 or 30 years) at a fraction of the cost of permanent insurance, because it is pure protection with no investment component. For most people the need is temporary — it disappears once the mortgage is paid, the kids are grown, and savings have built up. Buying cheap term and investing the difference almost always leaves your family better protected than an expensive whole-life policy.
How many years of income should I replace?
It depends on how long your dependents would need support. Replacing income until your youngest child is financially independent is a common anchor — often 10 to 20 years. A surviving spouse who works may need less; a single-income household with young children needs more. The lump sum, invested conservatively, is meant to throw off income for that window, so a longer replacement period means a larger policy.
Do I subtract my savings and existing coverage?
Yes — that is what keeps you from over-buying. Money already set aside (savings, investments, existing life insurance, a spouse's coverage) reduces the new coverage you need to fill the gap. Insurance should cover the shortfall, not duplicate what you already have. This is an educational model; your real number depends on your family's specifics, so confirm with a fee-only advisor or licensed agent.