Why Most People Get This Wrong

Most people either skip life insurance entirely, buy whatever their employer offers, or pick a round number that sounds large. None of those approaches is based on what your family would actually need.

The goal of life insurance is income replacement — making sure the people who depend on your income can maintain their standard of living if you're gone. Guessing at a number and hoping it's enough is not a plan.

What Is the DIME Method for Calculating Life Insurance?

DIME stands for Debt, Income, Mortgage, and Education. It's the most straightforward framework for getting to a defensible coverage number.

Debt: Add up all outstanding debts except the mortgage — car loans, credit cards, student loans, personal loans, medical debt. These don't disappear when you do.

Income: Multiply your annual income by the number of years your family would need replacement. A common starting point is 10 years, though many financial planners recommend 15–20 if you have young children.

Mortgage: Add the remaining balance on your mortgage. The goal is that your family keeps the house without struggle.

Education: If you have children, estimate the cost of four-year college for each one. Current public university tuition plus room and board runs $25,000–$30,000 per year. Private universities are $55,000–$65,000 per year.

Add those four numbers together and you have a reasonable baseline.

What Does That Look Like With Real Numbers?

A 42-year-old with a $380,000 mortgage balance, $40,000 in other debt, $95,000 annual income, two kids aged 8 and 11, and a 15-year income replacement target:

  • Debt: $40,000
  • Income: $95,000 × 15 = $1,425,000
  • Mortgage: $380,000
  • Education: 2 kids × $120,000 = $240,000

Total: $2,085,000

That number surprises most people. But consider what it actually represents: everything your family needs to not have to dramatically change their lives because of your absence.

Does the Amount Change If Both Spouses Work?

Yes. If both partners earn income and either can financially carry the household without the other's salary — even uncomfortably — then the coverage calculation changes. Some dual-income couples cover 10 years of the larger earner's income and 5 years of the smaller earner's, rather than 15 for both.

The right number is the one that honestly answers: how long would my family need to financially recover and adjust if my income disappeared tomorrow?

How Much Does $1 Million in Life Insurance Cost?

A lot less than most people assume. As a benchmark:

  • Healthy 35-year-old female, 20-year term, $1,000,000: approximately $35–$50/month
  • Healthy 40-year-old male, 20-year term, $1,000,000: approximately $65–$90/month
  • Healthy 45-year-old female, 20-year term, $1,000,000: approximately $65–$95/month

The younger and healthier you are when you apply, the lower the rate — and that rate locks in for the entire term. Waiting costs money.

Should I Buy Coverage Through My Employer?

Employer group life insurance is usually 1–2× your salary. That's far below what most families need. It's also not portable — if you leave the job, the coverage ends.

Employer coverage is a starting point, not a solution. If you're relying entirely on your group plan as your family's financial safety net, your family is likely underinsured.

What If I Have Health Issues? Does That Affect How Much Coverage I Can Get?

It affects price and which carriers will offer coverage, but most people with common health conditions — diabetes, high blood pressure, cholesterol, history of tobacco use — can still get meaningful coverage. The key is working with an independent agent who shops multiple carriers rather than getting locked into one company's underwriting criteria.

I'm licensed in 30 states and work with a range of carriers for different health profiles. The most expensive policy for one carrier may be a standard rate at another.

The Bottom Line

Most families need more coverage than they have, and the cost to close that gap is lower than most people expect. Running a DIME calculation takes about 10 minutes. Getting a quote takes another 5.

If you want a number specific to your situation — your income, your debts, your family's needs — get a quote below or book a call. I'll pull quotes from multiple carriers and show you exactly what coverage looks like at different price points.