Life Insurance Calculator 2026
Calculate how much coverage your family needs using the DIME method.
Your Situation
Recommended Coverage
$750,000
moderate coverage · 20-year term recommended
DIME Method Breakdown
Estimated Monthly Premiums
| Term | Monthly | Annual |
|---|---|---|
| 10-year term | $60.00/mo | $720/yr |
| 20-year term | $90.00/mo | $1,080/yr |
| 30-year term | $135.00/mo | $1,620/yr |
Estimates for healthy, non-smoking applicants. Actual rates vary by health, lifestyle, and insurer.
Disclaimer
- Premium estimates are rough approximations — get actual quotes from insurers.
- Review coverage every 3-5 years or after major life changes.
- Consider term life first; whole life is rarely cost-effective for pure protection.
The DIME Method for Life Insurance
DIME stands for Debt, Income, Mortgage, and Education — the four pillars of calculating how much life insurance you need. Rather than guessing with rules of thumb like "10 times your salary," the DIME method adds up your family's actual financial obligations to arrive at a personalized coverage amount.
How to Calculate Each Component
- D — Debt: Add up all non-mortgage debts: credit cards, auto loans, student loans, personal loans. Your family shouldn't inherit your debt burden.
- I — Income: Multiply your annual income by the number of years your family would need support. For families with young children, 10-15 years is common.
- M — Mortgage: Include the full remaining mortgage balance so your family can stay in the home without worrying about payments.
- E — Education: Estimate college costs per child. At $25,000-$60,000+ per year depending on public vs private, education is often the largest single component.
Term Life vs Whole Life Insurance
| Feature | Term Life | Whole Life |
|---|---|---|
| Duration | 10, 20, or 30 years | Lifetime |
| Cost | $25-$80/month typical | 5-15x more expensive |
| Cash Value | None | Yes (slow growth) |
| Best For | Most families | Estate planning (high net worth) |
For the vast majority of families, term life insurance is the right choice. It provides maximum coverage at the lowest cost. Buy term and invest the difference in tax-advantaged accounts like 401(k)s and IRAs.
Factors That Affect Your Premium
Age is the biggest factor — a 30-year-old pays roughly half what a 45-year-old pays for the same coverage. Health, smoking status, and family medical history also play major roles. Most policies require a medical exam, though some "no-exam" policies are available at higher rates.
When to Review Your Coverage
Reassess your life insurance every 3-5 years or after major life events: marriage, divorce, new child, home purchase, significant income change, or paying off major debts. As your children grow and debts shrink, your coverage needs typically decrease.
How Much Coverage Do Americans Actually Have?
LIMRA research shows the average American is underinsured by about $200,000. About 40% of US adults have no life insurance at all. Even a basic term policy can protect your family from financial catastrophe — don't let cost fears prevent you from getting covered.
Frequently Asked Questions
Is life insurance payout taxable?
No. Life insurance death benefits are generally received income-tax-free by beneficiaries. If the payout is invested and earns interest, that interest is taxable. Very large estates may face estate tax, but for the vast majority of families, the full benefit goes to your loved ones tax-free.
Can I get life insurance with a pre-existing condition?
Yes, though premiums will be higher. Conditions like diabetes, high blood pressure, or a history of cancer don't automatically disqualify you. Some insurers specialize in higher-risk applicants. Guaranteed-issue policies require no medical exam but cost more and offer lower coverage limits.