Agent Login   |    Policy Owner Login


How much life insurance do I need?

If you have a family, or plan to have a family, buy enough life insurance so that when combined with other sources of income, it will replace the income you now generate for them. Additionally, consider having enough to offset any additional expenses they will incur to replace the services you provide. Your family may also need extra money to make changes after you die, for example, they may want to relocate or your spouse may need to go back to school.

DIME Formula

The DIME formula is a common method used to determine how much life insurance coverage is necessary. DIME stands for Debt, Income, Mortgage, and Education, which are the four main factors that are considered when calculating life insurance coverage.

Once you have these four figures, add them together. This will give you a rough estimate of the life insurance coverage that you need.

Here's how to calculate life insurance coverage using the DIME formula:


Add up all your debts, including mortgages, car loans, credit card balances, student loans, and any other outstanding debts.


Determine how much income your family would need if you were to pass away. This includes both your current income and any future income that you would have


Calculate how much it would cost to pay off your mortgage in case of your passing.


If you have children, consider how much it would cost to pay for their education, including college expenses.

Other Considerations :

  • Consider if there is any “hidden income” that should also be planned for. Hidden income is income that you receive through your employment but that isn’t part of your gross wages. It includes things like your employer’s subsidy or your health insurance premium, the matching contribution to your 401(k) plan, and any other perks both large and small. This is an often-overlooked insurance need but can be significant.
  • If you want to create an inheritance or make a charitable contribution, buy enough life insurance to achieve those goals.
  • Plan for expenses that arise at death. These include the funeral costs, taxes and administrative costs associated with winding up an estate and passing property to heirs. At a minimum, plan for $15,000.
  • Consider additional factors such as your age, health, and lifestyle to help you determine your specific needs. If you are a first responder or other hero, you may want more coverage.

Want to Learn More?

Download our Buyer’s Guide for more information regarding life insurance.

Quick Answers to Common Life Insurance Questions

Click below to find answers to our most commonly asked questions. If you don’t find your answer please contact us directly and one of our representatives will be happy to address your specific concerns.