function calculateLifeInsurance() {
var income = parseFloat(document.getElementById('calc_annual_income').value) || 0;
var years = parseFloat(document.getElementById('calc_years_needed').value) || 0;
var mortgage = parseFloat(document.getElementById('calc_mortgage').value) || 0;
var debt = parseFloat(document.getElementById('calc_other_debt').value) || 0;
var education = parseFloat(document.getElementById('calc_education').value) || 0;
var funeral = parseFloat(document.getElementById('calc_funeral').value) || 0;
var savings = parseFloat(document.getElementById('calc_savings').value) || 0;
var existing = parseFloat(document.getElementById('calc_existing_ins').value) || 0;
var totalNeeds = (income * years) + mortgage + debt + education + funeral;
var availableAssets = savings + existing;
var finalNeed = totalNeeds – availableAssets;
if (finalNeed < 0) finalNeed = 0;
var resultContainer = document.getElementById('insurance-result-container');
var resultValue = document.getElementById('insurance-result-value');
var resultBreakdown = document.getElementById('insurance-breakdown');
resultContainer.style.display = 'block';
resultValue.innerHTML = '$' + finalNeed.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
resultBreakdown.innerHTML = 'Based on your inputs, your family requires
in total financial support. After subtracting your current savings and existing coverage of
.';
resultContainer.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
How Much Life Insurance Do You Really Need?
Determining your life insurance requirement is one of the most critical steps in a sound financial plan. It ensures that if the unthinkable happens, your family can maintain their lifestyle, pay off the home, and fund your children's future education without financial distress.
Understanding the DIME Method
Financial experts often recommend the DIME formula to calculate coverage accurately:
- Debt: Calculate all your personal debts except your mortgage (credit cards, car loans, personal lines of credit).
- Income: Multiply your annual salary by the number of years your family would need that income (usually until your youngest child reaches age 18 or 22).
- Mortgage: Include the total payoff amount for your home to ensure your family can stay in their residence.
- Education: Estimate the cost of sending your children to college or university.
Example Calculation
"Sarah earns $75,000 annually. She wants to provide income for 10 years ($750,000). She has a $300,000 mortgage and $20,000 in car loans. She wants to set aside $100,000 for her son's college. Her total need is $1,170,000. Since she has $50,000 in savings and a $100,000 policy through work, her additional life insurance need is $1,020,000."
Why You Should Re-evaluate Yearly
Life changes quickly. Major life events such as getting married, having a new baby, purchasing a larger home, or receiving a significant promotion should trigger a recalculation of your insurance needs. Using a Life Insurance Needs Calculator helps you avoid being "underinsured," a common mistake where families realize too late that their policy only covers a fraction of their true long-term costs.