Life Insurance Calculator
Estimate how much life insurance coverage you need.
Results update as you type.
This calculator is for illustrative purposes only. Actual rates, fees and terms vary by lender. Consult a qualified financial adviser before making borrowing decisions.
How it works
Life insurance replaces the financial support your dependents would lose if you died, and this calculator estimates how much coverage you need using the widely taught DIME method — Debt, Income, Mortgage, Education. You enter the annual income you want to replace and for how many years, your total debts including the mortgage, expected future education costs, and your current savings plus any existing coverage. It returns the recommended coverage and the portion attributable to income replacement. The idea is that a policy payout should be able to clear debts so your family keeps the home, fund major future costs like college, and provide enough to replace your income for the years your dependents need it, minus what you already have set aside. Choosing the number of years depends on your situation: covering until young children are independent, or until a spouse reaches retirement, are common approaches. This estimate is a starting point; term life insurance is usually the most affordable way to secure a large payout for a set period. Your actual needs may differ with other income sources, employer coverage, and goals, so it is wise to review with a licensed advisor. Enter your income, debts, and savings to estimate your coverage.
Coverage = (income × years) + debts + education − savings
The DIME method adds the income you want to replace over a set number of years, your outstanding debts and mortgage, and future obligations like children's education, then subtracts existing savings and coverage. The result estimates the life insurance payout your family would need to stay financially secure.
Source:DIME method (financial planning)
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter annual income to replace, years to replace income and debts + mortgage.
- 2
Adjust the options
Adjust future education costs and savings + existing coverage if they apply — sensible defaults are already set.
- 3
Read your result
Coverage needed updates instantly as you type — no button to press.
Frequently asked questions
How much life insurance do I need?
A common approach is the DIME method: add your debts, the income you want to replace over a set number of years, your mortgage, and future education costs, then subtract existing savings and coverage. This calculator does that instantly. Many people land somewhere between 10 and 15 times their annual income, but your specific obligations matter most.
What is the DIME method?
DIME stands for Debt, Income, Mortgage, and Education, the four major financial needs life insurance should cover. You total your outstanding debts, the income to replace for your chosen number of years, the mortgage balance, and expected education costs for children, then subtract current assets. It is a straightforward way to arrive at a realistic coverage amount.
How many years of income should I replace?
It depends on your family's situation. Many people cover the years until their youngest child becomes financially independent, or until a spouse reaches retirement age. A longer replacement period means more coverage. Choosing this number thoughtfully, based on when your dependents would no longer rely on your income, gives the most realistic estimate of your needs.
Should I buy term or whole life insurance?
Term life insurance covers a set period, such as 20 or 30 years, and is far cheaper for a given payout, making it the practical choice for most families needing large coverage during working years. Whole life is permanent and includes a cash value component but costs much more. For pure protection, term usually offers the best value.
Does employer life insurance count?
Yes, include any employer-provided coverage in your existing coverage when calculating needs, since it reduces the additional amount you must buy. However, employer coverage is often modest, typically one or two times salary, and usually ends when you leave the job. Because of that, many people supplement it with an individual policy they control and keep.