Calculate how much life insurance coverage you need using the DIME method.
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DIME Coverage = Debt + Income replacement (annual income × support years) + Mortgage balance + Education costs. Subtract existing life insurance and liquid savings.
Rule of thumb: 10-15x annual income. With young children: 20x. Use DIME method: Debt + Income (years to retirement) + Mortgage + Education.
Term life for income replacement: 20-30 year term, pure insurance, cheapest per dollar of coverage. Whole life for permanent needs or estate planning — not for most people.
A healthy 30-year-old male: $25-35/month for $500K 20-year term. Female: $20-28/month. Smokers pay 2-3x more. Buy young — rates only go up.
If no one depends on your income: probably not. Exception: cosigned debt, business partner coverage, estate planning needs, or you want to lock in young/healthy rates.
Major life events: marriage, divorce, new child, home purchase, income increase, or approaching retirement. Review every 3-5 years.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.