Life Insurance Calculator
Find out exactly how much life insurance coverage your family needs — and what it should cost.
Recommended Coverage
$1,085,000
20-year term · est. $59/mo
20-Year Term Premium Estimates
Healthy non-smoker estimates. Get quotes for exact pricing.
How Much Life Insurance Do You Need?
This calculator uses the DIME method— Debts, Income, Mortgage, and Education — the most comprehensive approach financial planners use to determine life insurance coverage. Rather than the oversimplified “10× your salary” rule, DIME accounts for your actual financial obligations. Your recommended coverage equals total financial needs (income replacement + mortgage + other debts + education fund + final expenses) minus assets already in place (existing policies + savings).
Income replacementis typically the largest component. If you earn $75,000/year and want to replace 10 years of income, that's $750,000 alone. The right number of years depends on how old your youngest child is and how long your spouse would need to become financially independent. Most families choose 10–20 years. Consider using a lower discount rate if you invest the proceeds — $750,000 invested at 5% can generate $37,500/year indefinitely without touching the principal.
Term life vs. permanent life insurance: For most families, a 20- or 30-year term policy is the best value. Term covers your highest-liability years (when the mortgage is unpaid, children are young) at the lowest cost. A 35-year-old can typically get $500,000 of 20-year term coverage for $25–$35/month. Whole life and universal life carry much higher premiums ($200–$400+/month for the same death benefit) because they include a savings component — rarely the most efficient way to invest.
When to buy: Rates are locked at purchase. A 30-year-old pays significantly less than a 40-year-old for identical coverage, even on the same policy. Each year of delay raises premiums. Health events can also make you uninsurable or dramatically more expensive to insure, so buying while healthy is the single biggest lever in minimizing the lifetime cost of coverage.
Frequently Asked Questions
How much life insurance does the average person need?
It varies widely. A 35-year-old with a spouse, two children, a $300,000 mortgage, and a $80,000 salary often needs $800,000–$1,200,000 in coverage. The right number comes from your actual numbers, not an average. Use the DIME calculator above — it only takes two minutes.
Is the 10× salary rule accurate?
It's a quick approximation, but often wrong. It ignores mortgage balance, number of children, existing savings, and how many years your family needs income support. DIME is more accurate. For many families the 10× rule underestimates coverage; for others (large savings, grown children) it overestimates.
Should I get term or whole life insurance?
For pure income-replacement coverage, term life almost always makes more sense. Whole life premiums can run 10–15× higher for the same death benefit. The savings component (cash value) grows slowly and has high fees. Most financial advisors recommend 'buy term and invest the difference' — the gap in premiums invested in a low-cost index fund typically outperforms whole life.
What term length should I choose?
Match the term to your coverage need. If your youngest child is 3 and you want coverage until they're 25, a 22-year term makes sense — round up to 25 or 30. If your primary goal is the mortgage, match the term to the remaining loan years. 20-year policies are the most common and often the best value per dollar.
Do both spouses need life insurance?
Yes, even if one spouse doesn't earn income. A stay-at-home parent provides childcare, household management, and other services that would cost $30,000–$50,000+/year to replace. Life insurance on the non-earning spouse covers those replacement costs.