Calculate how much coverage your family needs to stay financially secure.
Your Estimated Insurance Need:
$0
How to Determine Your Life Insurance Coverage
Choosing a life insurance policy is one of the most important financial decisions you will make for your family's future. The goal is to provide a financial safety net that replaces your income and covers immediate and future liabilities should you pass away unexpectedly.
The DIME Formula Explained
Many financial advisors recommend the DIME method to calculate coverage:
Debt: Total all your debts other than your mortgage, including car loans, credit cards, and student loans.
Income: Multiply your annual salary by the number of years your family would need that support (often until your youngest child reaches 18 or 21).
Mortgage: Include the remaining balance on your home to ensure your family can stay in their house.
Education: Estimate the cost of sending your children to college or vocational school.
Example Calculation
If you earn $75,000 a year and want to provide for 10 years, that is $750,000. If you have a $200,000 mortgage and $50,000 in existing savings, your math would look like this:
Once you know your number, you must choose a policy type. Term Life Insurance is generally the most affordable and provides coverage for a specific period (10, 20, or 30 years). Whole Life Insurance is permanent and includes a cash value component, but premiums are significantly higher.
function calculateInsuranceNeed() {
var income = parseFloat(document.getElementById('annualIncome').value) || 0;
var years = parseFloat(document.getElementById('yearsToReplace').value) || 0;
var debt = parseFloat(document.getElementById('mortgageBalance').value) || 0;
var college = parseFloat(document.getElementById('educationCosts').value) || 0;
var funeral = parseFloat(document.getElementById('funeralCosts').value) || 0;
var assets = parseFloat(document.getElementById('existingAssets').value) || 0;
var incomeNeed = income * years;
var totalLiabilities = incomeNeed + debt + college + funeral;
var netNeed = totalLiabilities – assets;
if (netNeed < 0) {
netNeed = 0;
}
var resultDisplay = document.getElementById('resultArea');
var totalDisplay = document.getElementById('totalNeedResult');
var breakdownDisplay = document.getElementById('breakdownText');
totalDisplay.innerHTML = "$" + netNeed.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
breakdownDisplay.innerHTML = "This covers " + years + " years of income ($" + incomeNeed.toLocaleString() + "), " +
"outstanding debts ($" + debt.toLocaleString() + "), and future costs ($" + (college + funeral).toLocaleString() + "), " +
"minus your current assets ($" + assets.toLocaleString() + ").";
resultDisplay.style.display = "block";
resultDisplay.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
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