“How much life insurance do I need?” almost always gets answered with a shrug and an “it depends.” It does depend — but on specific, knowable things, not a mystery. The purpose of life insurance is simple: if your income disappeared tomorrow, it replaces what that income was doing for the people who count on you. Once you frame it that way, the number falls out of two quick methods.
Method 1: the income multiple
The fastest estimate is 10–12 times your annual income. On a $70,000 salary, that’s $700,000–$840,000. It’s a fine starting point and a good sanity check — but it’s blunt. It ignores your actual mortgage, your debts, and how many years your kids still need support, so treat it as the rough draft.
Method 2: DIME (the one I’d use)
DIME builds the number from your real obligations. Add four things:
| Letter | What it covers | Example |
|---|---|---|
| D — Debt | Non-mortgage debts (cards, car, loans) | $20,000 |
| I — Income | Years of income to replace (e.g. 15×) | $900,000 |
| M — Mortgage | Remaining mortgage balance | $250,000 |
| E — Education | Kids’ future education costs | $100,000 |
| Total coverage | $1,270,000 |
That $1.27M is grounded in what your family would actually face, not a generic multiple. The human life value calculator runs this from your numbers, and the comprehensive life insurance analysis layers in savings and existing coverage.
Life insurance isn’t about your life — it’s about replacing what your income does for the people who depend on it. Size it to their need, not to a number that sounds big.
Subtract what’s already covered
You don’t need to insure a dollar that’s already handled. Reduce the DIME total by:
- Existing savings and investments your family could draw on.
- Coverage you already have through work (though job coverage leaves when the job does).
- Your partner’s income, if it would continue.
The remaining gap is the coverage to buy.
How long a term to buy
Term length should match how long others depend on you:
- Young parents, new mortgage → 20–30 years, covering until the house is paid and kids are grown.
- Mid-career, half-paid mortgage → 15–20 years.
- Near empty-nest, home nearly paid → less, or none.
Name your beneficiary clearly, and revisit coverage after big life changes — a new child, a new mortgage, a divorce.
Who can skip it
If no one relies on your income and your debts would die with your estate, you may need little or none — the human life value of an income nobody depends on is small. Singles with no dependents are the classic example.
Coverage by life stage
Your need rises and falls with your obligations, which is why coverage isn’t “set and forget”:
| Life stage | Typical need |
|---|---|
| Single, no dependents | Little or none |
| Married, dual income, no kids | Low–moderate |
| Young kids + mortgage | Highest — 10–15× income |
| Kids grown, mortgage nearly paid | Declining |
| Retired, no dependents | Often none |
The right number in your 30s is rarely the right number in your 50s — revisit it after every major life change: a new child, a new mortgage, a divorce, a paid-off home.
Put a number on it
Don’t guess, and don’t let an agent guess for you. Run DIME through the human life value calculator, then read the insurance guide and our breakdown of term vs whole life to choose the right kind of policy once you know the amount.
