Coverage Calculator
How Much Life Insurance Do You Need? Free Calculator (2026)
Updated April 2026
The Quick Answer
Start with 10-12 times your annual income. If you earn $80,000, that means $800,000 to $960,000 in coverage. But the real answer depends on your specific debts, dependents, savings, and goals.
Use the calculator below to get a precise number based on your actual situation.
Coverage Needs Calculator
Coverage Needs Calculator
Recommended Coverage Amount
$1,400,000
Breakdown of needs:
This calculator provides a general estimate. Education costs assume $40,000/year average (public university). Adjust inputs for private university ($60,000+/year) or if children are already in college.
The DIME Method Explained
DIME is a widely used formula for estimating life insurance needs. It stands for:
Debt
All non-mortgage debts: student loans, car loans, credit cards, personal loans. Everything that would become someone else's burden if you died.
Income
Your annual income multiplied by the number of years your family needs it replaced. Typically 10-15 years, or until your youngest child finishes education.
Mortgage
Your remaining mortgage balance. Life insurance should allow your family to stay in the home without struggling to make payments.
Education
Estimated college costs per child. Public university averages about $25,000-$30,000/year. Private university: $50,000-$60,000/year. Multiply by 4 years per child.
DIME Example: 35-year-old, $90,000 income, married, two kids
At age 35, a $1.5M 20-year term policy for a healthy non-smoker male costs approximately $68/month.
Coverage by Life Stage
Young Couple, No Kids, Renting
Cover income replacement and shared debts. If both partners earn enough to support themselves, you may not need life insurance at all. A 20-year term gives you coverage through your peak earning and family-building years.
Family with Young Kids, Mortgage
This is when you need the most coverage. Your family relies on your income, you have a mortgage, and children need support for 15-20 more years. Do not under-insure at this stage.
Stay-at-home parent: $500,000 - $750,000. Childcare costs $15,000-$25,000/year per child. A stay-at-home parent's economic contribution is substantial. With multiple young children, consider coverage equal to or greater than the working spouse.
Single Parent
Higher multiplier needed because you are the only provider. Coverage must replace your income, fund childcare, pay the mortgage, and cover education. Name a trusted guardian as beneficiary trustee, or set up a trust for the proceeds.
Empty Nester Approaching Retirement
You may not need coverage at all if your retirement savings are sufficient and your mortgage is paid off. Reduced coverage might make sense just for final expenses and estate equalization between heirs.
Business Owner with Partners
Personal coverage for your family plus business coverage for buy-sell agreement obligations and key person insurance. These are typically separate policies. The business should own the buy-sell policy.
Do Not Forget the Stay-at-Home Parent
A stay-at-home parent provides services that would cost thousands to replace:
Recommendation: at least 50-70% of the working spouse's coverage. With multiple young children, consider equal or even higher coverage for the stay-at-home parent.
What Not to Count as Coverage
Employer group life insurance
Usually 1-2x salary. It ends when you leave the job. Do not depend on it as your primary coverage. It is a supplement, not a replacement.
Accidental death insurance (AD&D)
Only pays if death is accidental. Does not cover illness, heart attack, cancer, or any other medical cause of death. Too narrow to rely on.
Mortgage life insurance from your lender
Overpriced, coverage decreases as your mortgage balance decreases, and benefits go to the lender, not your family. A regular term policy is cheaper and more flexible.