How Much Life Insurance
How Much Life Insurance Do I Need? A Simple Way to Work It Out
A common rule of thumb says 10 to 12 times your income, but your own numbers matter more. A simple, honest way to add up debts, income, the mortgage and college.
There's no magic number, but there is a sensible way to find yours
People often either guess or buy whatever amount a quote screen suggests. It helps to start from what your family would actually need.
Here is a simple method, plus a common rule of thumb, so you can walk into a conversation with real numbers.
The DIME method
Add those four together, then subtract savings and any existing life insurance you already have. What's left is a reasonable starting point.
- Debt: add up your debts other than the mortgage, such as credit cards, car loans and student loans
- Income: multiply your yearly income by the number of years your family would need it replaced
- Mortgage: add the balance still owed on your home
- Education: add the cost of college or training for your children, if that's a goal
The rule of thumb
A common rule of thumb is to have coverage equal to 10 to 12 times your yearly income. It's a quick way to start, not a plan. Your debts, your family and your savings can make the right number higher or lower.
Things that change the number
- How many people depend on you, and their ages
- Whether a spouse works, and how much they earn
- Savings, retirement accounts and coverage you already have through work
- Special needs, such as a child who will need support for life
- How long you expect to have a mortgage
What to weigh (the honest part)
Approval, price and the amount of coverage depend on your age, health and the carrier. We will not promise a result before you have applied, and we will tell you plainly if a policy isn't the right fit.
- More coverage costs more, so it's a balance between protection and what you can pay each month
- A term policy can give a large amount of coverage for a lower price than lifelong coverage
- Your needs will change. Many people review coverage after a marriage, a child or a new home
How we can help
- Walk through the DIME numbers together, in plain language
- Show what different coverage amounts would cost so you can decide
- Recommend a term length that matches your years of need
Want to talk it through?
Leave your number and a licensed agent will call to talk through where you are and what fits. It's free, and there's no pressure.
Life insurance by state
Common questions
What is the DIME method?
It stands for Debt, Income, Mortgage and Education. You add up each of those, subtract savings and any coverage you already have, and the result is a reasonable starting point for how much life insurance to buy.
Is 10 times my income enough?
It's a common starting point, not a rule. The right amount depends on your debts, your family, your spouse's income and your savings.
Should I count my work life insurance?
You can, but remember it may end if you leave the job and is often a small amount. Many people treat it as a bonus and buy their own policy for the core need.
Can I change the amount later?
You can usually buy an additional policy later, but it needs new health questions and your age and health at that time affect the price. Some policies offer a way to add coverage without new questions, and we'll tell you if yours does.
Does it cost anything to talk to an agent?
Talking through your options is free and comes with no obligation. Any policy you choose has its own premium, set by the carrier.
You don't have to figure this out alone.
Call to talk with a licensed agent and will be honest about what fits and what doesn't.
- Licensed insurance help
- No guaranteed eligibility, pricing, or availability
- Educational starting point
Information on this site is educational and does not guarantee eligibility, enrollment, pricing, or availability. It is not a recommendation to buy any specific plan or policy.