Insurance
Life Insurance Needs Calculator
The honest way to size a policy is to add up what your family would have to fund without your income, then subtract what already exists. That is the DIME method — debt, income, mortgage, education — and it is what this calculator runs.
Often the years until the youngest child is independent, or until a partner reaches retirement.
Car loans, student loans, credit cards — anything that would survive you.
Funeral, medical, and estate settlement costs.
Include employer-provided group coverage.
Coverage gap to fill
$1,365,000
What a new policy would need to cover, on top of what you have.
Employer group coverage usually ends when the job does, and it is often only one or two times salary. Count it, but do not build the whole plan on it.
- Total need
- $1,575,000
- Income replacement
- $1,200,000
- Debts, mortgage & education
- $375,000
- Already covered
- $210,000
Annual income × years of support.
Savings plus policies you already hold.
How this calculator works
Total need = (annual income × years of support) + mortgage + other debts + education costs + final expenses. The gap subtracts your available savings and any coverage you already hold, floored at zero.
Income replacement is not discounted to present value, the standard DIME simplification: it errs toward more coverage rather than less. This is an educational estimate, not an underwriting decision or a quote — actual premiums depend on your age, health, and the insurer.
Try an example
Frequently asked questions
How much life insurance do I need?
Enough to replace the income your dependents rely on, clear the mortgage and other debts, fund education you intended to pay for, and cover final expenses — minus the savings and coverage you already have. The common shortcut is 10–12× income, but that ignores your actual debts and assets, which is why this calculator adds them up directly.
What is the DIME method?
DIME stands for Debt, Income, Mortgage, Education — the four things a policy typically has to fund. You total them (plus final expenses), then subtract existing assets and coverage. It produces a defensible number in about two minutes, without an agent's sales worksheet.
Should I count my employer's life insurance?
Count it, but carefully. Group coverage is usually one to two times salary and it almost always ends when you leave the job, so it is the least reliable layer of the plan. Many people hold an individual term policy sized to the gap and treat employer coverage as a bonus.
Do I need term or whole life for this amount?
For most families, term. It buys the large coverage this calculation usually calls for at a fraction of the cost, for exactly the years the need exists. Whole life costs several times more because part of the premium funds a cash value — see our guide on how much life insurance you need for the trade-off in full.
Does the calculation account for inflation or investment returns?
No, and that is deliberate. Income replacement is counted in today's dollars without discounting, which slightly overstates the need — a conservative choice most planners prefer for a first estimate. A fee-only planner can build the discounted version around your specific situation.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.