How much life insurance
does your family actually need?

DIME guide

Why "10x your salary" isn't enough.

The 10x-income rule of thumb persists because it's easy to remember, but it treats a single 25-year-old renter and a 40-year-old parent of two with a $300,000 mortgage identically — which is exactly backwards. The DIME method fixes this by building your coverage number out of the actual obligations a family would be left holding: what's owed, what income needs replacing, what's left on the house, and what school will cost. It won't fit on a bumper sticker, but it fits your actual life.

The DIME formula, piece by piece

• Debt & final expenses: non-mortgage debt (credit cards, auto and personal loans, student loans that don't discharge at death) plus a burial/final-expense estimate — commonly $9,000–$11,000 nationally for a funeral with viewing and burial, though this varies widely by region and choices made
• Income replacement: annual income × years of support your dependents would need, typically 5–20 years depending on their ages
• Mortgage: the remaining balance, paid off in full so your family isn't forced to sell or refinance
• Education: cost per child × number of children — public four-year tuition, fees, and room & board commonly totals roughly $100,000 in today's dollars; private runs $200,000 or more

A worked example

Take a household earning $75,000 a year with $15,000 in non-mortgage debt, a $10,000 final-expense estimate, a $250,000 mortgage, two kids headed for public college (~$100,000 each), $20,000 in savings, and no existing life insurance. Debt and final expenses total $25,000. Replacing 10 years of income adds $750,000. The mortgage adds $250,000, and education for two kids adds $200,000 — a gross DIME need of $1,225,000. Subtracting the $20,000 in savings leaves a real coverage need of $1,205,000: a specific, defensible number, not a guess.

DIME vs. the income-multiple rule

For a family carrying a mortgage and raising children, DIME typically lands 3–4x higher than a simple 10x-salary estimate, because the income multiple ignores debt, the mortgage balance, and education costs entirely — it only ever looks at income. A single person with no mortgage and no kids might find DIME lands close to (or even below) 10x income, since there's simply less to replace. The gap grows exactly where the stakes are highest: families with a house and children to provide for.

What term life insurance actually costs

Term life insurance is one of the least expensive ways to close a coverage gap this size. A healthy person in their 30s can typically get a 20-year term policy with $100,000 in coverage for somewhere around $15–20 a month in 2026 — larger amounts cost proportionally more (roughly $30–38/month for $500,000 at the same age and health profile), and rates climb with age, smoking status, and health conditions. Compared against a seven-figure coverage need, the monthly premium for even a substantial policy is often a small fraction of a family's monthly budget.

Disclaimer

This calculator provides an educational estimate using the DIME method and is not a substitute for advice from a licensed insurance professional or financial advisor. It does not account for health conditions, tobacco use, occupation, or other underwriting factors that affect actual premiums, and it does not attempt to value a stay-at-home parent's uncompensated household and childcare labor. Use it as a starting point for a conversation, not a final number.