Life Insurance Calculator — How Much Coverage Do You Need?

Calculating Your Life Insurance Coverage Need

This calculator uses a needs-based approach to determine how much life insurance you should carry. Rather than relying on the simple 10x-income rule of thumb, it adds up specific financial obligations: income replacement for a chosen number of years, total outstanding debts including mortgage, and future expenses such as college tuition for children. It then subtracts existing coverage and current savings to identify your coverage gap -- the additional amount of life insurance you need to purchase.

The DIME method (Debt, Income, Mortgage, Education) is one of the most widely recommended frameworks for this calculation. Income replacement typically covers 10 to 15 years of earnings to give your family time to adjust financially. Debt coverage ensures your mortgage, car loans, student loans, and credit card balances do not become a burden on survivors. Child-related expenses should include estimated college costs, which average $25,000 to $60,000 per year depending on whether you plan for public or private universities.

Term life insurance is the most cost-effective way to close a coverage gap. A healthy 35-year-old can typically get a 20-year, $500,000 term policy for $25 to $40 per month. Match the term length to your longest financial obligation -- if your youngest child is 5, a 20-year term covers them through college. Review your coverage whenever you experience a major life event such as marriage, the birth of a child, a home purchase, or a significant salary increase, since these events often change the amount of protection your family needs.