How Much Life Insurance Do You Need?

Updated June 10, 2026 · 5 min read

Buy too little and your family is exposed; buy too much and you waste premium. Here’s a practical way to size your coverage.

Start with the “DIME” method

Add up four things:

• D — Debt: credit cards, car loans, and other debts (excluding the mortgage, counted next).
• I — Income: your annual income × the number of years your family would need support (often 10).
• M — Mortgage: the remaining balance so your family can stay in the home.
• E — Education: estimated cost of college or other education for your kids.

Add those up, then subtract savings and any existing coverage (like a small policy through work). The result is a solid starting estimate.

A simpler rule of thumb

Many advisors suggest 10–15× your annual income as a quick baseline. It’s rougher than DIME but a fine sanity check — a $75,000 earner lands around $750k–$1.1M.

Don’t forget the non-earner

A stay-at-home parent provides childcare, household management, and more that would be expensive to replace. They need coverage too.

Term length

Match the term to the need: long enough to cover the years until the mortgage is paid and the kids are independent. A 20- or 30-year term is common.

The bottom line

Size the need with DIME, sanity-check with the income multiple, and choose a term that covers your family’s dependent years. Compare life insurance quotes to see what that coverage costs.