Life Insurance Calculator
Estimate how much life insurance your family would need to replace your income and clear debts.
About the Life Insurance Calculator
Enter your yearly income and how many years to replace it, your debts, the mortgage balance, children's education costs, final expenses, and the savings and cover you already have. The calculator suggests a cover amount.
The DIME method adds up Debts, Income to replace (often 10 years or until children are independent), the Mortgage and Education costs, then subtracts savings and existing cover. Term life insurance is usually the cheapest way to buy this much cover.
The formula
Cover = income × years + debts + mortgage + education + final expenses − existing assets
Worked example
Income 70,000 for 10 years, debts 15,000, mortgage 200,000, education 80,000, final expenses 15,000, 50,000 already in place
- 700,000 + 15,000 + 200,000 + 80,000 + 15,000 = 1,010,000
- Minus 50,000 existing
- Suggested cover: 960,000
Things to keep in mind
- A planning estimate; inflation, investment returns on the payout and your partner's income aren't modelled.
Questions people ask
Is 10× income enough?
It's a common rule of thumb; DIME gives a more personal figure.
Term or whole life?
Term life covers a set period at much lower cost; whole life adds savings and costs far more.
Does a stay-at-home parent need cover?
Yes: replacing childcare and household work costs money, so estimate it as income.