Term Life Insurance Calculator — How Much Coverage Do You Need?

Enter your income, debts, mortgage, and education goals, and get a recommended term life coverage amount using the DIME needs-analysis method. This tells you how much coverage to buy — not what a policy costs.

Put this calculator on your website — free

Copy one snippet and give your visitors a working Life Insurance Calculator.

How the DIME needs analysis works

This calculator answers one question: how much term life insurance coverage do you need — not what a policy costs. It uses the DIME method, the needs analysis most fee-only planners reach for: Debt, Income, Mortgage, Education. Add up what your death would cost the people who depend on you — years of your paycheck, every debt that doesn't die with you, the roof, the tuition — then subtract the coverage and savings already in place. What's left is the gap a policy should fill.

The result is rounded up to the nearest $50,000 because that's how policies are actually sold, and because underestimating is the one mistake this exercise exists to prevent.

The formula

Coverage = (Income × Years) + Debts + Mortgage + Education − Existing coverage & savings

Income × Years replaces your paycheck long enough for your family to adapt — 10 years is the common default, 20 if your kids are toddlers, 5 if they're nearly launched. Debts and the mortgage are wiped out in one stroke so survivors keep the house without your income. Education is the total you'd want banked for all children. Existing coverage counts employer group life, personal policies, and liquid savings your family could actually spend.

Worked example

A parent earning $85,000 wants 10 years replaced ($850,000), and adds $20,000 of debts, a $250,000 mortgage, and a $100,000 education fund — a total DIME need of $1,220,000.

They already have $200,000 (a 2× salary employer policy plus savings), leaving a gap of $1,020,000 — so the recommendation is $1,050,000 of term coverage, rounded up to the nearest $50,000.

Term vs. whole, and why we won't quote you a premium

For most families the answer is term life: it covers the decades when someone actually depends on your income, and it costs a fraction of whole life — often 5–10× less for the same death benefit. Whole life bundles insurance with a savings vehicle you're rarely getting at a good price; buy the protection cheaply and invest the difference.

As for premiums: any site that quotes you a price from four form fields is guessing. Real pricing depends on your age, sex, health class, smoking status, and each insurer's underwriting appetite — a healthy 35-year-old and a 55-year-old smoker might pay 10× apart for the identical policy. The number this page gives you is the one that's actually in your control: how much coverage to ask for. Take it to a broker and make the insurers compete on price. One pro tip: employer coverage usually evaporates when the job does, so treat it as a bonus, not a foundation.

Frequently asked questions

How much life insurance do I need?

Use the DIME method: add your Debts, Income replacement (annual income times 5–20 years), Mortgage balance, and Education costs for your kids, then subtract existing coverage and savings. For a typical family that lands between 8× and 12× annual income — far more than the 1–2× salary an employer policy provides.

What is the DIME method for life insurance?

DIME stands for Debt, Income, Mortgage, Education — the four costs your death would leave behind. You total them, subtract coverage you already have, and buy a policy for the gap. It's more honest than the old '10 times salary' rule because it reflects your actual debts and dependents rather than a one-size multiplier.

Is term or whole life insurance better?

For most families, term. It covers the years someone actually depends on your income and costs roughly 5–10× less than whole life for the same death benefit. Whole life bundles in a savings component that's rarely competitive; most people do better buying cheap term protection and investing the difference.

Why doesn't this calculator show premium prices?

Because honest premiums can't be computed from these inputs. Pricing depends on your age, sex, health class, smoking status, family history, and each insurer's underwriting — the same policy can cost 10× more for one applicant than another. This calculator nails down the coverage amount; get real quotes from multiple insurers for the price.

Do stay-at-home parents need life insurance?

Usually yes. A stay-at-home parent's death creates real replacement costs — childcare, transportation, household management — that can easily run $30,000–$50,000 a year. Run this calculator with that replacement value as the income figure; even without a paycheck, the coverage need is rarely zero while kids are young.

Related calculators