Income & Family
$
yrs
Typically 10–15 years
yrs
Leave 0 if no children
Debts & Expenses
$
$
Car loans, credit cards, student loans
$
Funeral, medical, estate costs (~$15K)
$
Average 4-year public college ~$110K
Existing Resources
$
$
$
Recommended Coverage
—
—
Income Replacement
—
years × salary
Total Obligations
—
debts + expenses
Existing Coverage
—
already covered
Coverage Breakdown
| Category | Amount | Notes |
|---|
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Term vs Whole Life Insurance
The two main types of life insurance serve different purposes. For most families focused on income replacement, term life insurance is the recommended choice due to its low cost and simplicity.
| Feature | Term Life | Whole Life |
|---|---|---|
| Coverage Period | 10, 20, or 30 years | Lifetime |
| Monthly Cost (healthy 35yr, $500K) | $25–$35/mo | $300–$400/mo |
| Cash Value | None | Yes (slow growth) |
| Best For | Income replacement, mortgages | Estate planning, lifelong needs |
| Simplicity | Simple | Complex |
💡 Rule of thumb: Most financial experts recommend 10–12× your annual income in life insurance coverage. This calculator uses a more precise needs-based approach, but that quick formula is a good sanity check.
Frequently Asked Questions
How much does term life insurance cost?
A healthy 30-year-old can get a 20-year, $500,000 term policy for $20–$30/month. A 40-year-old pays $35–$55/month for the same coverage. Rates are based on age, health, gender, smoking status, and coverage amount. Women typically pay 20–30% less than men of the same age. Buying when you're young and healthy locks in the lowest rates for the full term.
Do I need life insurance if I'm single with no dependents?
Generally, if you have no dependents who rely on your income, you don't need much (or any) life insurance. You might still want a small policy to cover final expenses and any co-signed debts. However, if you plan to have a family someday, locking in a policy now while you're young and healthy gets you the lowest rates — and guarantees insurability even if health changes later.
How long should my term life policy last?
Choose a term that covers your peak financial responsibility years. Common strategies: match the term to your mortgage payoff date, cover your children until they finish college, or carry coverage until you're financially independent and don't need income replacement. A 20-30 year policy bought in your 30s typically covers most major financial milestones. Many people buy a 20-year and a 10-year policy simultaneously to ladder coverage as needs decrease over time.
What is the DIME method for calculating life insurance?
DIME stands for Debt, Income, Mortgage, and Education. Add up: all debts, 10 years of income replacement, your mortgage balance, and estimated education costs for children. This simple framework gives a solid baseline coverage estimate. Our calculator uses a similar approach but also factors in your existing resources (savings, other insurance, spouse income) to give a more personalized net coverage need.
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