How Much Life Insurance Do You Actually Need?

The DIME method is a simple way to calculate life insurance needs: Debts (all debts except mortgage), Income (annual income × years until youngest child is independent), Mortgage (remaining balance), Education (estimated college costs for each child).

Add these four numbers and subtract your current savings and existing life insurance.

Most financial planners recommend 10–12× annual income as a starting point, then adjust for your specific situation. Don't forget to insure stay-at-home spouses — replacing their childcare and household work costs $50,000–$100,000/year..