How Much Life Insurance Do I Actually Need?

The most common rule of thumb is "10 times your income" — but that is a rough shortcut, not a plan. A more accurate approach looks at what your family would actually need if you were gone tomorrow.

The DIME Method

D — Debt: Everything you owe: mortgage balance, car loans, credit cards, student loans.

I — Income replacement: Your annual income multiplied by the number of years until your youngest child is independent or your spouse reaches retirement.

M — Mortgage: The full payoff amount on your home if not already counted in debt.

E — Education: Estimated college costs for each child. Add those four numbers and you have a solid coverage target.

Adjust for What You Already Have

Subtract existing life insurance, savings, and investments your spouse could draw on. The gap is how much new coverage to buy.

Term vs. Permanent

For most families, a term life policy covers the years of highest financial risk at the lowest cost. A 20- or 30-year term often makes sense for people with young children and a mortgage. Permanent policies serve different goals — estate planning, final expenses, or building cash value.

How Often Should You Recalculate?

Review your coverage after marriage, divorce, a new child, a home purchase, or a significant income change. Life changes mean your coverage needs change.

Not sure where you stand? Wisler offers a free coverage review — comparing term and permanent options across multiple carriers.