Debt
Car loans, student loans, and other non-mortgage debt that would still need to be paid.
Term life insurance calculator
What is your family's protection number?
If you were not here tomorrow, how much would your family need to stay on track? Add up your responsibilities with the DIME formula to see the term life coverage to aim for.
The DIME formula
Put a dollar amount on your responsibilities
Saying “I need to protect my family” means little until you put a number on it. DIME adds up the four responsibilities that do not go away if a parent passes too soon.
Income replacement
Years needed (24 minus your youngest child's age) multiplied by your yearly gross income.
Mortgage
The bank still expects payments. Paying off the home keeps your family in it.
Education
College for each child. A common planning figure is about $200,000 per child.
Example: John, age 40
John earns $150,000, has two kids with the youngest at 14, a $500,000 mortgage, and $60,000 in car loans.
- Debt$60,000
- Income: (24 − 14) × $150,000$1,500,000
- Mortgage$500,000
- Education: 2 × $200,000$400,000
- Family Protection Number$2,460,000
John is worth $2.46 million to his family. A term policy of about $2.5 million moves that responsibility from his spouse to an insurance company.
FAQs
Common questions
How much term life insurance do I need?
A practical starting point is your Family Protection Number from the DIME formula: non-mortgage debt, plus your yearly gross income for each year until your youngest child turns 24, plus your mortgage balance, plus college costs for each child. That total is the amount of term coverage that would let your family keep its life on track without you.
Why does the calculator use age 24 for the youngest child?
Most kids finish college and become financially independent around 24 or 25. Replacing your income until then means your family can keep its lifestyle through the years your children still depend on you.
Should I count life insurance from my employer?
Enter it as existing coverage to see the gap, but keep in mind that workplace coverage usually ends when you leave the job. Many families treat it as a bonus rather than the core of their protection.
How long should my term policy be?
Long enough to cover your biggest responsibilities. The calculator suggests the shortest standard term that lasts until your youngest child is 24 and your mortgage is paid off.
Is this a quote?
No. It is an educational estimate. Your actual premium and approved coverage depend on age, health, and underwriting. A free call can compare options across many carriers.