Life Insurance Series
Life · How Much Coverage
How Much Life Insurance
Do You Actually Need?
The most common amount of life insurance Americans carry is also the most wrong: 1-2x annual income. That covers maybe 18 months of family expenses — then the money runs out while the kids are still in elementary school.
annual income — the actual rule of thumb
For families with dependents. This funds replacement income for 20+ years, pays off the mortgage, and covers college costs. Most families need significantly more than they have.
Three ways to calculate
The Multiplier Method (quick)
10-15× your annual income, depending on your situation. Younger with kids = closer to 15×. Older with grown kids = closer to 10×. Fast, rough, but better than nothing.
The DIME Method
Add up your Debts, Income (years needed × annual), Mortgage balance, and Education costs (estimate $200K/kid for college). The total is your coverage target. More accurate than a flat multiplier.
The Replacement Income Method
Calculate how much capital your family needs to generate your current income safely (typically dividing by 0.04 for a 4% safe withdrawal). For $100K income that's $2.5M. Add mortgage + college on top. Most accurate, most thorough.
The actual DIME breakdown for a typical family
For a 35-year-old in good health, a 20-year $1.6M term policy runs roughly $50-$75/month.
Want a real number for YOUR situation?
We'll walk through DIME with your actual numbers — debts, income, mortgage, kids — and tell you exactly how much you need plus what it costs.
Carriers We Represent
We're independent — we shop the market for the policy that fits, not the highest commission.
Carrier logos shown are trademarks of their respective owners. We work with additional regional carriers — ask about a specific plan.
Keep Reading