Life insurance
Do You Need Life Insurance? How to Calculate What Your Family Really Requires
If someone depends on your income — a spouse, children, aging parents, or a business partner — the honest answer is usually yes, you need life insurance. The harder question is how much. Buy too little and you leave a gap; buy too much and you’re paying for coverage you don’t need. Here’s the simple framework I use with clients to land on the right number.
The DIME method
DIME is an easy way to add up what your family would actually need. Total these four pieces and you’ll have a realistic coverage target:
DDebts
Add up what you owe — credit cards, car loans, student loans, and any other balances — so they don’t pass to your family along with the grief.
IIncome
Multiply your take-home income by the number of years your family would need support. A common starting point is 10 years, but earlier in your career or with young children you may want more.
MMortgage
Include enough to pay off (or keep up with) the mortgage, so your loved ones can stay in their home without the monthly pressure.
EEducation & final expenses
Set aside money for your children’s future education, plus funeral and end-of-life costs, so those bills never become a burden.
Term or permanent?
Once you know the amount, the next choice is the type. Term life covers you for a set number of years at the lowest cost — ideal for covering the working years while children are home and the mortgage is being paid down. Permanent life lasts your whole life and builds cash value, which can make sense for lifelong needs or estate planning. Many families use a mix of both.
A quick reality check
- Don’t rely on employer coverage alone — it’s often only one to two times your salary and disappears if you leave the job.
- Subtract savings and existing policies from your DIME total to find the gap you still need to fill.
- Buying younger and healthier generally means lower premiums locked in for the term.
- Revisit your coverage after big life changes — a new baby, a home purchase, or starting a business.
Let’s calculate your number together
I’ll walk you through the DIME math, compare term and permanent options across top-rated carriers, and find coverage that fits your family and your budget. Free, and with no obligation.
Prefer to talk? Call919-353-2500. Sandra Wester · Inspired Insurance Solutions · NPN 21768120.
This article is for general education only. It is not a guarantee of coverage or benefits. Plans, prices, and rules vary. Read your official plan documents before you enroll.
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