Life Insurance Needs Calculator (DIME & Human Life Value)
Estimate how much life insurance you need with two methods — the DIME needs analysis and the Human Life Value income approach — net of existing coverage and assets. Educational, not financial advice.
Excludes mortgage (entered separately).
DIME sums Debt, Income (annual × years to replace), Mortgage, and Education, then subtracts existing coverage and assets. Human Life Value estimates the present value of your future earnings: income × the present-value annuity factor over years to retirement at your discount rate. The two methods often differ — DIME is needs-based, HLV is income-based — so compare both. Neither captures every situation. Not financial advice — consult a professional. Everything runs in your browser.
About this tool
How much life insurance you need is one of the hardest questions in personal finance because it depends on what you are trying to protect — and there are two well-established schools of thought, both offered here. The DIME method is a needs-based approach: it adds up the specific obligations your death would leave behind, namely Debt (consumer debts plus final expenses), Income (your annual income multiplied by the number of years your family would need it replaced), Mortgage (the outstanding balance so the home can be paid off), and Education (a fund for your children's schooling). DIME is concrete and easy to defend line by line, which is why many advisors start there. The Human Life Value (HLV) method comes at it from the income side: it estimates the economic value of your future earnings by taking the present value of the income you would have earned between now and retirement, discounted back to today's dollars using a discount rate. HLV captures the full earning power you provide but is sensitive to the assumptions you feed it. This calculator runs both — toggle between the tabs — and in each case subtracts your existing life insurance and liquid assets to arrive at the additional coverage gap. The two methods frequently produce different numbers (DIME is obligation-driven, HLV is income-driven), and seeing both is exactly the point: the right answer for most families lies in considering both alongside their goals. Neither method captures everything — future raises, a surviving spouse's income, inflation on expenses, or special-needs care, for example. Use the results to frame a conversation, not to set a policy amount in stone. This is educational and not financial advice — consult a licensed insurance professional. Everything runs in your browser; nothing is uploaded.
How to use it
- Choose the DIME tab (needs-based) or the Human Life Value tab (income-based).
- For DIME: enter debts, annual income and years to replace, mortgage, and an education fund.
- For HLV: enter after-tax income, years to retirement, and a discount rate.
- Enter your existing coverage and liquid assets to subtract.
- Read the recommended additional coverage; compare both methods.
Frequently asked questions
- What is the DIME method?
- DIME estimates life insurance need by summing Debt (plus final expenses), Income (annual income × years to replace), Mortgage balance, and Education costs, then subtracting existing coverage and assets. It is a concrete, needs-based approach.
- What is the Human Life Value method?
- Human Life Value estimates the present value of your future earnings to retirement, discounted to today's dollars. It values your economic contribution as a wage earner rather than itemizing specific obligations.
- Why do the two methods give different answers?
- DIME is obligation-driven (it counts what must be paid off and replaced for a set period); HLV is income-driven (it values your entire future earning stream). They answer slightly different questions, so seeing both gives a fuller picture.
- How many years of income should I replace in DIME?
- It depends on your family's situation — common choices range from 10 to until your youngest child is independent, or until a surviving spouse reaches retirement. Adjust the years input to match your circumstances.
- What discount rate should I use for Human Life Value?
- A modest real rate (often 2–4%) is common, reflecting that future dollars are worth less today. A higher discount rate lowers the calculated value. There is no single correct figure — it is an assumption.
- Is this financial advice?
- No. It is an educational estimate using two standard frameworks. Neither captures every factor (raises, inflation, a spouse's income). Consult a licensed insurance professional. Nothing is uploaded.