How much life insurance do I actually need?
We use the DIME method — Debt + Income + Mortgage + Education — to estimate how much life insurance you need and the approximate monthly premium. Below, you can refine the number with an optional needs analysis.
01About you
$
yr
yr
$
Better health = lower premium
Smoking can double the premium or more
02DIME
$
$1,600,000
Calculated: $1,600,000
$
$
DIME Total$2,150,000
yr
03Existing coverage
$
$
04 · Recommended coverage
You need to cover
$2.15M
by the DIME method · D+I+M+E = $50k + $1600k + $300k + $200k
Coverage gap
$2000k
$2150k needed − $150k existing
Under-covered
Estimated premium · term 20yr
$114/mo
Term insurance
$1368/yr
estimated · subject to underwriting
DIME total
$2150k
Coverage gap
$2000k
Existing insurance
$100k
Coverage status
Under-covered
The life insurance rule of thumb
DIME calculates $2150k. The simple 10× income rule gives $800k — DIME is more precise because it reflects your actual debts.
Term life covers a fixed period (for example, 20 years) and builds no cash value. Whole life costs roughly 10× more but accumulates cash value over time. Which one fits best depends on your budget, time horizon, and goals.
Your coverage progress
Already covered$150k 7%
Still needed$2000k 93%
Next step: get a term insurance quote for $2000k (about $114/mo) to close the gap.
02 · DIME breakdown
4 components, 1 number: $2150k
DIME coverage composition
D — Debt
$50k2%
I — Income×20
$1600k74%
M — Mortgage
$300k14%
E — Education
$200k9%
Total$2150k
Your biggest component is I — Income×20, 74% of the total. Reducing that debt directly lowers how much insurance you need.
03 · Term vs Whole
Same $2150k coverage · two very different products
Term 20yr
Pure insurance · pays if you die within 20 years
Est. monthly premium
$114/mo
$27k total over 20yr
Straightforward coverage for a set period, with the lower premium of the two options. It builds no cash value or accumulated savings.
Whole life
Permanent + cash value accumulation
Est. monthly premium
$1142/mo
$274k total over 20yr
Costs ~10× more. Cash value grows slowly and is illiquid.
Cost difference
$247k
over 20yr · that difference invested at 7%
The premium difference between whole and term, invested in an index fund, would generate significantly more than the policy's cash value. That's why "buy term and invest the difference" is the standard advice.
Where the premium fits
Budget
The insurance premium is a monthly category. See where $114/mo fits in your budget.
Open ↗The investment alternative
Investment calculator
If you invest the difference between whole and term, how much would you have in 20 years?
Open ↗Save your work