Loan to Value Ratio Calculator

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Life Insurance Needs Calculator

Calculate how much coverage your family actually needs.

Recommended Total Coverage

$0

How Much Life Insurance Do You Really Need?

Choosing a life insurance policy is one of the most critical financial decisions you will make. It ensures that your family can maintain their lifestyle, pay off debts, and fund your children's education if you are no longer there to provide for them.

The DIME Formula Explained

Many financial experts suggest using the DIME formula to calculate your coverage needs. DIME stands for:

  • Debt: Sum of all your private debts excluding your mortgage.
  • Income: Multiply your annual salary by the number of years your family would need it.
  • Mortgage: The remaining balance on your home loan.
  • Education: The estimated cost of sending your children to college.

Example Calculation

Imagine a 35-year-old earning $60,000 per year with a $200,000 mortgage and two young children. To provide income for 15 years, cover the mortgage, and set aside $100,000 for college, the calculation would look like this:

  • Income Replacement ($60k x 15): $900,000
  • Mortgage & Debt: $200,000
  • College Fund: $100,000
  • Final Expenses: $15,000
  • Total Needed: $1,215,000

Types of Life Insurance

Once you know your number, you must choose a policy type:

  1. Term Life Insurance: Provides coverage for a specific period (10, 20, or 30 years). It is generally the most affordable option.
  2. Whole Life Insurance: Offers lifelong coverage and includes a cash value component that grows over time.
function calculateInsurance() { var annualIncome = parseFloat(document.getElementById("annualIncome").value) || 0; var yearsNeeded = parseFloat(document.getElementById("yearsNeeded").value) || 0; var totalDebts = parseFloat(document.getElementById("totalDebts").value) || 0; var collegeCosts = parseFloat(document.getElementById("collegeCosts").value) || 0; var funeralCosts = parseFloat(document.getElementById("funeralCosts").value) || 0; var existingAssets = parseFloat(document.getElementById("existingAssets").value) || 0; var incomeReplacement = annualIncome * yearsNeeded; var grossNeeds = incomeReplacement + totalDebts + collegeCosts + funeralCosts; var netNeeds = grossNeeds – existingAssets; if (netNeeds 0) { summary += "After accounting for your existing assets of $" + existingAssets.toLocaleString() + ", your additional coverage gap is estimated at $" + netNeeds.toLocaleString() + "."; } else { summary += "This covers your income replacement for " + yearsNeeded + " years, debts, education, and funeral expenses."; } breakdownText.innerHTML = summary; resultBox.style.display = "block"; resultBox.scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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