Question 1

What is the DIME method?

Accepted Answer

DIME stands for Debt, Income replacement, Mortgage, and Education — four buckets of financial obligation a life insurance payout is meant to cover. Add them up, subtract savings and any existing coverage you already have, and what's left is a reasonable coverage target. It's one of the most widely used needs-analysis frameworks in financial planning, more detailed than a flat income multiple.

Question 2

Why not just use "10x my income"?

Accepted Answer

A flat multiple is a fast rule of thumb, but it ignores your actual situation — someone with a paid-off house and no kids needs very different coverage than someone with a large mortgage and two young children. DIME accounts for the specific obligations a payout would need to clear, which is why it tends to be more accurate for households with debt or dependents.

Question 3

Does this calculator give me a premium quote?

Accepted Answer

No — it estimates how much coverage to shop for, not what it costs. Actual premiums depend on age, health, smoking status, policy length, and the specific insurer's underwriting, none of which a formula can replicate. Use the coverage number here when you request real quotes.

Term Life Insurance Needs Calculator

The DIME method

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