What DIME covers
DIME is a quick way to make sure a policy would actually replace what you provide:
- Debt — non-mortgage balances (cards, car, personal loans) so your family isn’t left with them.
- Income — your annual income times the number of years your family would need it. Replacing 10 years is a common middle ground; until the youngest child is independent is another.
- Mortgage — enough to pay off the home so housing is secure.
- Education — a fund for your children’s schooling.
Then subtract what you already have — existing policies and liquid savings. What’s left is the gap. A simpler cross-check is the “10–12× income” rule; if the two land far apart, dig into why.
Two common mistakes
Leaning only on work coverage. Group life is usually one to two times salary and disappears when you change jobs — fine as a top-up, risky as your whole plan. Buying the wrong type. For income replacement and a mortgage, term insurance is usually the cheapest fit; permanent policies earn their place for lifelong needs. See types of life insurance to match the product to the job.
Frequently asked questions
- How much life insurance do I need?
- A common starting point is DIME: Debt + Income × years + Mortgage + Education, minus coverage and savings you already have. The “10–12× income” rule is a quick cross-check. Both are estimates.
- Does employer coverage count?
- You can subtract it, but cautiously — it’s usually limited and ends when you leave the job, so treat it as a supplement.
- Term or permanent for this need?
- Term is usually cheapest for income replacement and a mortgage; permanent is for lifelong needs. Many people combine both.
Educational only; not financial or insurance advice, and not a quote. This estimate uses simplified rules of thumb; your actual need depends on your full situation.