{
  "slug": "how-much-life-insurance-do-i-need",
  "title": "How Much Life Insurance Do I Need?",
  "heading": "How Much Life Insurance Do I Need?",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/how-much-life-insurance-do-i-need",
  "summary": "A household with a $60,000 income, $180,000 in debts, and two kids needing $200,000 for future costs needs roughly $850,000 in coverage.",
  "description": "The DIME method (Debt, Income, Mortgage, Education) estimates life insurance need by adding up what your family would need to pay off debts, replace your income for a set number of years, cover the remaining mortgage, and fund children's education, then subtracting existing savings and coverage you already have.",
  "formula": "Coverage Needed = Debts + (Annual Income × Replacement Years) + Remaining Mortgage + Education Costs − Existing Savings − Current Coverage.",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=how-much-life-insurance-do-i-need",
  "inputs": [
    {
      "id": "debts",
      "label": "Non-mortgage debts",
      "kind": "number",
      "hint": null,
      "default": 25000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "income",
      "label": "Annual income to replace",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "years",
      "label": "Years of income to replace",
      "kind": "number",
      "hint": null,
      "default": 10,
      "unit": null,
      "min": 1,
      "max": 30
    },
    {
      "id": "mortgage",
      "label": "Remaining mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 220000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "education",
      "label": "Future education costs",
      "kind": "number",
      "hint": null,
      "default": 100000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "existingSavings",
      "label": "Existing savings/investments",
      "kind": "number",
      "hint": null,
      "default": 30000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "currentCoverage",
      "label": "Current life insurance coverage",
      "kind": "number",
      "hint": null,
      "default": 50000,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "need",
      "label": "Additional coverage needed",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "gross",
      "label": "Total gross need (DIME)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "offsets",
      "label": "Existing savings + coverage offset",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Non-mortgage debts: 25000 $",
      "Annual income to replace: 60000 $",
      "Years of income to replace: 10",
      "Remaining mortgage balance: 220000 $",
      "Future education costs: 100000 $",
      "Existing savings/investments: 30000 $",
      "Current life insurance coverage: 50000 $"
    ],
    "outputs": [
      "Additional coverage needed: $865,000",
      "Total gross need (DIME): $945,000",
      "Existing savings + coverage offset: $80,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter non-mortgage debts ($).",
      "Enter annual income to replace ($).",
      "Enter years of income to replace.",
      "Enter remaining mortgage balance ($).",
      "Enter future education costs ($).",
      "Enter existing savings/investments ($).",
      "Enter current life insurance coverage ($).",
      "Read your additional coverage needed on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "debts": 15000,
        "income": 36000,
        "years": 6,
        "mortgage": 130000,
        "education": 60000,
        "existingSavings": 18000,
        "currentCoverage": 30000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "debts": 25000,
        "income": 60000,
        "years": 10,
        "mortgage": 220000,
        "education": 100000,
        "existingSavings": 30000,
        "currentCoverage": 50000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "debts": 40000,
        "income": 96000,
        "years": 16,
        "mortgage": 350000,
        "education": 160000,
        "existingSavings": 48000,
        "currentCoverage": 80000
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How much life insurance do I need?",
      "a": "Using DIME with $25,000 in debt, $60,000 income replaced over 10 years, a $220,000 mortgage, and $100,000 in future education costs, gross need is $945,000; subtracting $30,000 in savings and $50,000 existing coverage leaves about $865,000 in additional coverage needed."
    },
    {
      "q": "What is the DIME method?",
      "a": "Debt + Income replacement + Mortgage + Education — a simple sum-of-needs approach that's more tailored than the generic '10x your salary' rule of thumb."
    },
    {
      "q": "Is 10x income enough on its own?",
      "a": "It's a rough shortcut that ignores mortgage balance, debt, and number of dependents — DIME usually produces a more accurate, often higher, number for families with a mortgage and young kids."
    },
    {
      "q": "Should I buy term or whole life for this need?",
      "a": "Term life matched to your mortgage or working years is the lowest-cost way to cover a DIME-calculated need, since the need itself typically shrinks over time as debt is paid down and kids finish school."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/how-much-do-i-need-for-emergency-fund",
    "https://www.revenuelab.fyi/toolbox/how-much-will-college-cost-in-18-years"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — How Much Life Insurance Do I Need? (https://www.revenuelab.fyi/toolbox/how-much-life-insurance-do-i-need)"
}