DIME method + quick estimate · Free · No signup · No sales pitch
The standard rule of thumb is 10–12 times your annual income in life insurance coverage. A person earning $75,000 per year needs $750,000 to $900,000 in coverage. However a more precise calculation adds up income replacement for 10–20 years plus mortgage payoff plus education costs for children minus existing savings. The average American is underinsured by $200,000 according to LIMRA research.
Life insurance need is calculated by estimating the financial gap your death would create for dependents. The DIME method covers four factors: Debt payoff, Income replacement, Mortgage payoff, and Education costs for children. A term life policy covering this full amount ensures your family maintains their lifestyle and meets major financial goals without your income.
At 10x income your family is covered for approximately 10 years of income replacement. For 2 dependents, consider the full DIME method for a more precise number.
For a more precise calculation, use the DIME Method tab above.
Surprised by this number? Share it with friends and family