How Much Life Insurance Do I Need?
Calculate your life insurance needs from your income, debts and family situation, with your state's college costs and estate taxes and its cost of living index for context.
The amount depends on the years of income to replace, outstanding debts, the number of children to fund through college, final expenses, and the coverage and savings already in place. The calculator adds the first four, subtracts the last, and rounds the gap up to the nearest $50,000.
DIME stands for Debt, Income, Mortgage, and Education. It's a formula for life insurance needs: add up all debts, multiply income by years to replace, add mortgage balance, and add education funding needs for children. Then subtract existing resources like savings and current coverage.
The calculator bases income replacement on your actual income, which already reflects local costs, and applies state-specific figures for college costs and estate taxes. It shows your state's cost of living index relative to the national average for context and does not multiply the result by it.
If your estate may be subject to estate taxes (12 states plus DC have estate taxes, 5 states have inheritance taxes), life insurance can provide funds to pay these taxes without forcing heirs to sell assets. The calculator includes estate tax estimates for applicable states when an estate value is entered. The Estate & Inheritance Tax Calculator gives a detailed tax estimate.
Employer-provided life insurance counts as existing coverage in the calculator. Whether it continues after you leave the job depends on the plan's portability and conversion terms, so enter it separately from a policy you own.
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