How much life insurance do you need?

A practical DIME-style way to size coverage—debts, income, mortgage, education—without turning it into a sales pitch.

Alex RiveraReviewed September 26, 20262 min read

Educational only. PolicyPlain does not sell insurance and does not provide insurance, legal, or financial advice. Coverage rules and prices vary by state and insurer. Read our full disclaimer.

The right face amount starts from the jobs your income does for people who depend on you—not from a round number on a brochure. Work through debts, years of income, housing, and education goals, then subtract what you already have.

This page pairs with PolicyPlain’s life needs calculator. Educational only—not a recommendation to buy.

Start with people, not products

List who would feel a financial shock if you died: partner, children, co-signer, aging parents you support. Coverage amount is about their runway, not a round number that sounds impressive.

The DIME conversation frame

Debts — cards, personal loans, co-signed notes you do not want left behind
Income — years of replacement at a fraction of current earnings
Mortgage — balance you might want cleared or buffered
Education — rough future schooling funds if that is a family goal

Add final expenses if relevant. Subtract liquid savings and existing coverage. The remainder is a discussion starting point.

Run the calculator

Interactive tool

Life needs

Step 1 of 4· Household

25%

Household
Obligations
Assets
Results

Dependents to protectChildren or others who rely on your income

Years of support to plan forOften until youngest child is independent

Your annual income

Spouse/partner income (optional)Used lightly as an offset—not a full replacement model

Income replacement percentageMany planners model 60–80% of take-home needs

Advanced mode uses income × replacement % × years instead of a flat 10× rule alone—then reconciles with DIME and scenario bands.

Full page: Life insurance calculator (needs)

Term vs whole (do not mix the questions)

Needs sizing answers “how much / how long.” Product type answers “what structure.” Compare term vs whole costs only after the need is clear:

Common mistakes

Buying a round number with no expense map
Ignoring a partner’s unpaid labor
Forgetting existing group life (and that it may vanish when you leave a job)
Naming beneficiaries incorrectly (see our beneficiaries guide)
Treating calculator output as underwriting approval

Checklist

List dependents and years of runway
Total debts + mortgage goals + education goals
Subtract savings and current coverage
Run Life needs + Term vs whole tools
Bring the Excel pack to a licensed conversation

Disclaimer

PolicyPlain is educational. Underwriting, health, and product rules vary. Consult licensed professionals for advice.

Frequently asked questions

What is the DIME method?+

An educational shorthand: Debts, Income replacement, Mortgage, and Education goals—summed as a starting conversation about needs, not a final underwriting answer.

Is term always better than whole life?+

They solve different problems. Term is usually cheaper pure death benefit for a period; whole life mixes protection with cash value and higher premiums. Compare purpose before price.

Should stay-at-home parents carry coverage?+

Unpaid caregiving has economic value (childcare, household labor). Many families discuss coverage on both adults—personal choice with a licensed advisor.