Life insurance needs calculator

A common starting point is the DIME method — add up your Debts, the Income your family would need to replace (annual income × the years they’d need it), your Mortgage, and future Education costs — then subtract savings and any coverage you already have. This calculator does exactly that. A rougher rule of thumb is 7–10× your income, but it ignores your specific debts, savings and family situation, which is why the itemized approach is better.

Yes — subtract it, because it reduces what you need to buy privately. But treat it cautiously: group coverage usually isn’t portable (you lose it when you leave the job), is often capped at 1–2× salary, and can be cut by your employer. Many people hold a personal policy on top of group coverage so a job change doesn’t leave them exposed.

Often less, sometimes none. The classic need — replacing income for dependants and covering a mortgage — usually fades once the kids are independent and the house is paid off. What can remain is covering final expenses, equalizing an estate among heirs, or covering a tax bill at death (for example, the deemed disposition on a rental or cottage). That’s where permanent insurance is sometimes used for estate planning. See our life insurance guide for when it’s worth keeping.

For pure needs — income replacement while you have a mortgage and dependent kids — term life covers the most for the least, because the need is temporary. Permanent (whole or universal) costs far more for the same death benefit but never expires and builds cash value, which is mainly useful for lifelong/estate needs. Most families are best served by term; we break down the trade-off in term vs whole life.

It depends on how long your family would need support — until the youngest child is independent, until the mortgage is gone, or until a surviving spouse reaches retirement. Ten years is a reasonable default; lengthen it if you have young children or a single income, shorten it if your kids are nearly grown and savings are strong.