How much life insurance do you actually need? Enter your debts, income, mortgage, kids' college, and final expenses — the DIME method gives you a coverage target in dollars, plus a rough monthly premium estimate. No signup, no email.
DIME is a 4-factor framework used by financial planners to size life insurance. The acronym:
| Letter | Factor | What to add |
|---|---|---|
| D | Debts | All non-mortgage debt: credit cards, car loans, student loans, medical debt, personal loans. Anything that would transfer to your family. |
| I | Income | Annual income × years to replace (default 10). Adjust up for stay-at-home spouses, down for working spouses. |
| M | Mortgage | Full remaining payoff balance. This lets the family stay in the home debt-free. |
| E | Education | Projected 4-year college cost per child (~$80K-$280K depending on public vs. private). |
| + | Final expenses | Funeral ($10K-$25K), final medical bills, estate settlement. |
Sum the four letters + final expenses = your coverage target. Round up. The DIME method tends to give a more accurate number than the 10x-income shortcut for families with mortgages or kids.
DIME is a 4-factor rule: D = Debt (non-mortgage), I = Income × years, M = Mortgage payoff, E = Education per child. Add them all plus $10K-$25K for final expenses, and you have a reasonable coverage target. Tends to give a more accurate number than the 10x-income rule of thumb for families with mortgages or kids.
Common rule of thumb: 5-10x annual income, plus all debts and final expenses. If you're truly single with no dependents, a smaller policy (or none) is often fine — but consider whether anyone (aging parent, co-signer, business partner) would be financially impacted. Term life is cheap when you're young and healthy: a $250K 20-year term is usually under $20/month for a 30-year-old non-smoker.
Term life = coverage for a set period (10, 20, 30 years) at a fixed premium. Whole life = permanent coverage with a savings/cash-value component, usually 5-10x more expensive for the same face amount. For most people, term is the right answer — cheaper, simpler, and you can buy a lot more coverage per premium dollar. Skip whole life unless you've maxed retirement accounts and have a specific estate-planning need (e.g., funding a trust for a special-needs dependent).
The calculator uses a rough industry average of $0.50 per $1,000 of coverage per month for a healthy 35-year-old non-smoker buying a 20-year term policy. That's a midpoint — actual rates vary widely. A 25-year-old non-smoker might pay $0.20 per $1,000; a 55-year-old smoker might pay $3.00. Use the estimate as a sanity check, then get 3 real quotes from term-life aggregators (Policygenius, Quotacy, Ladder).
Only if they would be unable to work after your death (e.g., they have a disability, they're a stay-at-home parent, they're the primary caregiver for an aging relative). If both spouses work and the survivor could continue earning, you can halve the income-replacement factor — or just use the full income but reduce the years to 5-7 instead of 10. The DIME method is flexible by design.
Employer-sponsored group life is usually 1-2x your salary and is not portable — you lose it if you leave. It's fine as a starting point but rarely enough. Most financial planners recommend supplementing with an individual 20-year term policy that you own outright. The calculator's total target is for total coverage (employer + individual), so subtract any employer coverage to find the gap you need to fill.
Disclaimer: The DIME method and the premium estimate are guidelines, not financial advice. Your ideal coverage depends on income stability, debts, family size, and goals. Premium estimates use a rough industry average — actual rates vary by age, health, gender, smoking status, and insurer. For complex situations (blended families, business ownership, special-needs dependents, large estates), consult a fee-only financial advisor or a licensed insurance broker.