Debt, budgeting and life insurance
Life Insurance Calculator (DIME Method)
Estimate how much life insurance you need with the DIME method: debts, income, mortgage and education costs, minus your savings and current coverage.
Estimated Coverage Needed
Term Life EstimateHow This Calculator Works
This calculator estimates how much life insurance your family may need with the DIME method: Debts and final expenses, Income replacement, Mortgage balance and Education costs for your children. It then subtracts the savings and life insurance you already have.
The income part is the present value of the years of income you enter, discounted at a 3.5% return above inflation, so a lump sum can pay out income that keeps up with prices. The calculator also adds a flat $15,000 for final expenses.
Frequently Asked Questions
Is term life or whole life better for most families?
Term life is the better fit for most families. A level-premium term policy (20 or 30 years) usually costs far less than whole life for the same death benefit, and the term covers the years when your children and mortgage depend on your income.
Are life insurance death benefits taxable?
Usually not. Under IRC Section 101(a), a death benefit paid as a lump sum to a named beneficiary is generally exempt from federal income tax, and state income tax usually does not apply either.
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