How much life insurance do I need?
Add four lines. Take off what you already have. What is left is your number.
Written by William Litner, FCAS. Last updated November 3, 2026. Numbers: this site's DIME math, worked on made-up families, in the open below.
- Add four lines (debts, income years, the mortgage, and school costs), take off savings and coverage you already have, and what is left is your number.
- The four lines are DIME: debts, your pay times the years your kids still need it, the mortgage, and school costs.
- Ten times pay is only a first glance: it skips your mortgage, your debts, and your real years.
The method has a name: DIME
Four lines set the size. Their first letters spell DIME. This site uses the same four lines.
D: Debts
Every debt except the mortgage. Cards, car loans, and the rest. The payout clears them first.
I: Income
Your yearly pay, times the years your kids still need it. Five years of pay means five times one year.
M: Mortgage
What you still owe on the house. Not what the house is worth. The balance on the loan.
E: Education
School costs still ahead for your kids. College is the big one for most families.
Worked once, with a made-up family
Two parents, two kids. One earns $50,000 a year. Their youngest needs five more years of support.
Their four lines
Debts: $10,000. Income: $50,000 times 5 years is $250,000. Mortgage: $150,000. School: $40,000. The four lines add to $450,000.
Their gap
They hold $30,000 in savings and coverage. $450,000 minus $30,000 is $420,000. That is their working number. See this same math on How it works.
A second family, a bigger gap
Priya earns $68,000. She parents her 8-year-old alone. She already owns a $50,000 policy.
Her four lines
Debts: $7,500. Income: ten years of pay is $680,000. Mortgage: $215,000. School: $0 in this run. She is not counting on paying school costs. Her lines add to $902,500.
Her gap
Minus $9,000 saved and her $50,000 policy, the gap is $843,500. Her old policy counts in full. It is also about 6% of her need.
The shortcut, and its catch
Plain questions, plain answers
Common questions
How much life insurance do I need?
Add four lines: debts, your pay times the years your kids still need it, the mortgage, and school costs. Take off savings and coverage you already have. What is left is the gap. The method is called DIME.
What is the DIME method?
DIME adds Debts, Income years, the Mortgage, and Education costs. Then it takes off savings and coverage you have. What is left is the working number.
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