{
  "slug": "life-insurance-coverage-need-calculator",
  "title": "Life Insurance Coverage Need Calculator",
  "heading": "How Much Life Insurance Do I Need?",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/life-insurance-coverage-need-calculator",
  "summary": "DIME method coverage target minus what you already have.",
  "description": "Most coverage guidance stops at '10 times your income', which either overshoots for a debt-free household with grown kids or badly undershoots for a young family with a mortgage and college ahead. This calculator uses the DIME method instead — Debt, Income replacement, Mortgage, Education — and subtracts existing coverage and liquid savings to produce the gap you actually need to buy. Income replacement is modeled over the years your dependents rely on it, discounted lightly for the fact that a lump sum can be invested. Final expenses are included as a separate line because funeral and estate settlement costs routinely reach $10,000-$20,000. Once you have the gap number, remember term insurance prices roughly linearly with coverage: doubling the face amount roughly doubles the premium, so buying the correct number rather than a round one is worth real money over a 20- or 30-year term.",
  "formula": "Need = Debts + Mortgage + (Income × Replacement Years) + Education + Final Expenses − Existing Coverage − Liquid Savings.",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=life-insurance-coverage-need-calculator",
  "inputs": [
    {
      "id": "income",
      "label": "Annual income to replace",
      "kind": "number",
      "hint": null,
      "default": 85000,
      "unit": "$",
      "min": 0,
      "max": 2000000
    },
    {
      "id": "years",
      "label": "Years of income replacement",
      "kind": "number",
      "hint": null,
      "default": 15,
      "unit": "years",
      "min": 0,
      "max": 40
    },
    {
      "id": "mortgage",
      "label": "Mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 280000,
      "unit": "$",
      "min": 0,
      "max": 3000000
    },
    {
      "id": "debts",
      "label": "Other debts (cards, auto, student)",
      "kind": "number",
      "hint": null,
      "default": 25000,
      "unit": "$",
      "min": 0,
      "max": 1000000
    },
    {
      "id": "education",
      "label": "Future education costs",
      "kind": "number",
      "hint": null,
      "default": 120000,
      "unit": "$",
      "min": 0,
      "max": 1000000
    },
    {
      "id": "finalExpenses",
      "label": "Final expenses",
      "kind": "number",
      "hint": null,
      "default": 15000,
      "unit": "$",
      "min": 0,
      "max": 100000
    },
    {
      "id": "existing",
      "label": "Existing life coverage",
      "kind": "number",
      "hint": null,
      "default": 100000,
      "unit": "$",
      "min": 0,
      "max": 5000000
    },
    {
      "id": "savings",
      "label": "Liquid savings and investments",
      "kind": "number",
      "hint": null,
      "default": 40000,
      "unit": "$",
      "min": 0,
      "max": 5000000
    }
  ],
  "outputs": [
    {
      "id": "gap",
      "label": "Additional coverage needed",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "rounded",
      "label": "Policy size to shop for",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalNeed",
      "label": "Total DIME need",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "incomeNeed",
      "label": "Income replacement portion",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "incomeMultiple",
      "label": "Equivalent multiple of income",
      "format": "number",
      "hint": "x",
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual income to replace: 85000 $",
      "Years of income replacement: 15 years",
      "Mortgage balance: 280000 $",
      "Other debts (cards, auto, student): 25000 $",
      "Future education costs: 120000 $",
      "Final expenses: 15000 $",
      "Existing life coverage: 100000 $",
      "Liquid savings and investments: 40000 $"
    ],
    "outputs": [
      "Additional coverage needed: $1,575,000",
      "Policy size to shop for: $1,600,000",
      "Total DIME need: $1,715,000",
      "Income replacement portion: $1,275,000",
      "Equivalent multiple of income: 20.2"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual income to replace ($).",
      "Enter years of income replacement (years).",
      "Enter mortgage balance ($).",
      "Enter other debts (cards, auto, student) ($).",
      "Enter future education costs ($).",
      "Enter final expenses ($).",
      "Enter existing life coverage ($).",
      "Enter liquid savings and investments ($).",
      "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": {
        "income": 51000,
        "years": 9,
        "mortgage": 170000,
        "debts": 15000,
        "education": 70000,
        "finalExpenses": 9000,
        "existing": 60000,
        "savings": 25000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "income": 85000,
        "years": 15,
        "mortgage": 280000,
        "debts": 25000,
        "education": 120000,
        "finalExpenses": 15000,
        "existing": 100000,
        "savings": 40000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "income": 136000,
        "years": 24,
        "mortgage": 450000,
        "debts": 40000,
        "education": 190000,
        "finalExpenses": 24000,
        "existing": 160000,
        "savings": 65000
      }
    }
  ],
  "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 many years of income should I replace?",
      "a": "Until your youngest dependent is financially independent, or until a surviving spouse reaches retirement assets — commonly 10-20 years. Longer replacement periods raise the number quickly, so pick the year your household stops needing the income."
    },
    {
      "q": "Should I count retirement accounts as savings?",
      "a": "Only partly. Early withdrawal rules and the fact that the surviving spouse still needs to retire mean most planners count taxable savings fully and retirement balances lightly or not at all."
    },
    {
      "q": "Term or whole life?",
      "a": "For pure gap coverage, level term matching your replacement period is dramatically cheaper per dollar of death benefit. Permanent policies serve estate and business-continuity goals, not the basic income-replacement need this tool sizes."
    },
    {
      "q": "Does group coverage at work count?",
      "a": "Include it as existing coverage, but remember most group policies end when the job does and are often capped at one or two times salary."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/refinance-break-even-calculator"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Life Insurance Coverage Need Calculator (https://www.revenuelab.fyi/toolbox/life-insurance-coverage-need-calculator)"
}