How much life insurance do I need?
By Colson · Updated June 13, 2026
Most people need life insurance roughly equal to 10–12 times their annual income, or — more precisely — their total debts, plus several years of income, plus the mortgage and future education costs, minus existing coverage and savings. The right number depends on who relies on your income.
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Calculate how much you need →What is the DIME method?
DIME is a four-part checklist for sizing a policy: Debt, Income, Mortgage, Education. You add up what your family would need to stay financially whole if your income disappeared, then subtract what's already covered.
Debt: all non-mortgage balances (credit cards, auto, student and personal loans) plus final expenses. Income: your annual income multiplied by the number of years your family would need it — commonly 10. Mortgage: the remaining balance so your family can keep the home. Education: expected costs like college for your children.
How many years of income should you replace?
A common default is 10 years, but match it to your situation: replace income until your youngest child is independent, until a mortgage is paid off, or until a non-working spouse reaches retirement. Longer dependency periods mean more coverage.
Is the 10–12× income rule good enough?
The 10–12× rule is a fast sanity check, not a substitute for the DIME calculation. It can under-shoot for families with large mortgages or several young children, and over-shoot for those with significant savings and few dependents. Use it to gut-check the DIME result, not replace it.
Term vs. whole life for covering a need
For pure income replacement, level term life is almost always the most cost-effective choice — it covers the years your family is financially dependent on you, at a fraction of the cost of permanent insurance. Whole life adds lifelong coverage and cash value, but at a much higher premium for the same death benefit.
Frequently asked questions
How much life insurance do I need for a family of four?
A typical family of four with a mortgage and two children often needs $500,000 to $1,000,000 or more. Run the DIME numbers — debts, ~10 years of income, the mortgage balance and college costs, minus existing coverage — to get a figure tailored to you.
Is 10x my salary enough life insurance?
Ten times salary is a reasonable starting point, but it ignores your specific mortgage, debts and education goals. It's a quick check; the DIME method gives a more accurate, personalized number.
Should stay-at-home parents have life insurance?
Yes — replacing the childcare, household and logistics work a stay-at-home parent provides can cost tens of thousands of dollars a year, so coverage on both parents is common.
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