The DIME method sizes life insurance: Debt + Income replacement + Mortgage + Education. Summing the four, minus existing coverage, gives the gap to fill.
The example
$20k debt, $60k×10 inc, $200k mtg, $100k edu.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Sum of DIME | $920,000 |
| 3 | − $250k existing | → $670,000 |
The formula
The formula:
How it works
How it works:
- Debt — non-mortgage debts to clear (cards, loans, final expenses).
- Income — annual income × years your family needs it replaced.
- Mortgage — the outstanding balance to pay off the home.
- Education — future schooling costs; subtract existing coverage for the gap.
Illustrative math only — not insurance, financial, or legal advice. Policy language, state regulation, and carrier rules govern actual claims, premiums, and coverage. Always read the policy and consult a licensed professional.
Try it: interactive demo
Income, years, plus debt/mortgage/education.
Variations
Income replacement
The I in DIME:
Coverage gap
Need − existing:
Round up to a policy
Common face amounts:
Pitfalls & errors
Subtract existing. The gap is total need minus current coverage and assets.
Income years. Choose how long income must be replaced.
Not advice. DIME is a rule of thumb — consult a licensed advisor.
Practice workbook
Frequently asked questions
How do I calculate life insurance needs in Excel?
What does DIME stand for?
How much income should I replace?
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