Life Insurance Needs Calculator
How much life insurance do I need?
Size your coverage with the DIME method: add your Debt, your Income replaced over the years your family would need it, your Mortgage balance, and future Education costs, then subtract the life insurance and savings you already have. The result is the new coverage you need. Enter your numbers below for an instant estimate.
Educational estimate only, not financial or insurance advice. Kadence does not provide financial advice. Confirm any coverage decision with a licensed professional.
How the DIME method works
DIME breaks the coverage question into four concrete needs, adds them, and subtracts what a family already has. It is a fast, defensible way to move from a vague "how much?" to a number you can act on.
D is for Debt
Total the non-mortgage debt your family would inherit: credit cards, car loans, personal loans, and co-signed student loans. Coverage should clear these so no one services your debt from a reduced income.
I is for Income
Multiply your annual income by the number of years your household would need it replaced. This is usually the largest piece, because it funds day-to-day living for the years it takes dependents to become independent.
M is for Mortgage
Add the remaining balance on your home. Paying off the mortgage keeps your family in their home without a monthly payment, and it is a clean, known number to include.
E is for Education
Estimate future education costs for your children, from remaining school through college. Funding this protects a goal that a surviving spouse would otherwise struggle to cover alone.
Then subtract what you already have
The calculator subtracts your existing life insurance, including group coverage through work, plus liquid savings set aside for your family. The result is your coverage gap: the new policy amount to discuss with a licensed agent.
Related terms and guides
Frequently asked questions
What is the DIME method for life insurance?
DIME is a formula for sizing life insurance coverage. It adds four needs your family would face if you died: Debt you owe, Income your household would lose, your Mortgage balance, and future Education costs. The total, minus any coverage you already hold, is your estimated coverage gap.
How many years of income should I replace?
A common approach replaces income until your youngest dependent is financially independent, often ten to twenty years. Choose the number of years your family would need your income to maintain their standard of living. A longer horizon raises the estimate; pick what reflects your household.
Should I subtract my existing coverage and savings?
Yes. The goal is your coverage gap, not your total need. Subtract life insurance you already own, including group coverage through work, plus liquid savings earmarked for your family. The calculator does this for you so the result reflects only the new coverage you still need.
Is this calculator financial advice?
No. This tool produces an educational estimate to help you frame a conversation with a licensed agent. It does not account for taxes, inflation, or your full financial picture. Kadence does not provide financial advice. Confirm any coverage decision with a licensed professional.