How much life cover do you actually need? This builds the answer piece by piece — the DIME method: income to replace, debts to clear, final expenses and future funds, minus the cover and savings you already have. Every component stays visible in the breakdown below, and everything updates live in your browser. The defaults are the worked example.
The maths: total need = (income × years) + mortgage + other debts + final expenses + education fund + other goals − existing cover − savings. If what you already have covers the total, the recommendation is $0.
Sanity check: a common rule of thumb is cover of 10–15× annual income. The multiple above uses your total need after offsets — if it lands far outside that band, it usually means an input (often the years of income, or a large education fund) deserves a second look, not that the arithmetic is wrong.
Every component of the need, the offsets you already have, and the final recommendation — nothing is hidden inside the headline figure.
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How much life insurance you need, built piece by piece: income replacement, debts, final expenses and education funds, less existing cover and savings — with a full breakdown and income-multiple check.
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Work out how much life insurance you need with a full needs analysis in the DIME style: the income your household would have to replace, the mortgage and other debts to clear, final expenses, and optional education and lump-sum funds — then subtract the life cover and savings you already have, so the recommendation is the real gap, not a guess.
On an $85,000 income with 10 years to replace, income replacement is $85,000 × 10 = $850,000. Add a $210,000 mortgage and $30,000 of other debts ($240,000), final expenses of $15,000 and an education fund of $100,000, and the gross need is $850,000 + $240,000 + $15,000 + $100,000 = $1,205,000. Subtract existing cover of $100,000 and savings of $50,000 ($150,000) and the recommended cover is $1,205,000 − $150,000 = $1,055,000 — which is 12.41× the $85,000 income, inside the usual 10–15× rule-of-thumb band.
Total need = (annual income × years to replace) + mortgage balance + other debts + final expenses + education fund + other lump-sum goals. Recommended cover = total need − existing life cover − savings and investments you would use, floored at zero: if what you already have meets or beats the need, the recommendation is $0 and the calculator says you may already have enough. The income multiple is the need after offsets divided by annual income, shown to two decimals as a sanity check against the common 10–15× rule of thumb. The income-replacement part assumes the full income is needed for the full period, with no growth, inflation or investment return applied to the payout.
Enough to replace the income your household depends on for the years it depends on it, clear the mortgage and other debts, cover final expenses and any funds you want guaranteed — minus the cover and usable savings you already have. On the worked example here that is $1,055,000. The common shortcut of 10–15× income lands in a similar place for many households, but the needs analysis shows you exactly which pieces make up your number.
A structured way to total up a life insurance need: Debts, Income replacement, Mortgage and Education — the four big blocks — plus final expenses, less the resources you already have. This calculator follows that structure and shows every block in the breakdown, so you can challenge any single input instead of trusting a single headline figure.
Long enough for your dependants to stop depending on it: until the youngest child finishes education is the common choice, or until your partner reaches retirement if they rely on your income. Shorter periods cut the premium sharply but leave a gap if the money runs out before the need does — try 10, 15 and 20 years and compare.
Yes, as existing cover — but check two things: the amount is often only 1–2× salary, which is far below a full need, and it usually ends when you leave the job. Counting it here is correct for today’s gap; just re-run the numbers without it if you are changing employers.
Not necessarily. The multiple runs high when the replacement period is long, the mortgage is large, or the education fund is big — all deliberate choices you can see in the breakdown. It runs low when debts are small or a partner has their own income. The multiple is a prompt to review the inputs, not a verdict.
Then your existing cover plus usable savings meet or exceed the calculated need, and the recommendation floors at $0. That is a real and useful answer — but revisit it after a new mortgage, a new child, a pay rise, or when an existing policy nears its end date, because the need moves with your life.
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