Why "10x your salary" isn't a plan
Salary multiples ignore the things that actually vary between families: whether you rent or carry a $400,000 mortgage, whether you have one child or four, whether your spouse earns. Two households with identical salaries can need wildly different coverage. The DIME method replaces the guess with four concrete line items:
- D — Debts: everything that wouldn't die with you — credit cards, car loans, personal loans — plus final expenses (a funeral alone commonly runs $8,000–$12,000).
- I — Income: annual income × the years your family would need support. Ten years is a common default; use the years until your youngest child is independent, or until your spouse's retirement plan can carry the household.
- M — Mortgage: the payoff balance, so the family keeps the home without the payment.
- E — Education: a fund per child. $100,000 roughly covers four years at an in-state public university today; private school ambitions push higher.
Then subtract what's already in place: existing policies (including employer group coverage, with the caveat below) and liquid savings that would realistically be available.
Term vs. whole life, in one honest paragraph
Term life is pure protection: a fixed death benefit for 10–30 years, at the lowest cost per dollar of coverage. Whole life bundles insurance with a savings vehicle, costs 5–15x more for the same benefit, and its cash value grows slowly after fees. For the core job — protecting dependents during your working years — term coverage sized by DIME, with the premium savings invested, beats whole life for the overwhelming majority of households. Whole life earns its keep in narrower cases: lifelong dependents, estate-tax planning, business buy-sell agreements.
Buying it right
- Match the term to the need. Youngest child is 3? A 20-year term covers them to adulthood. Mortgage has 25 years left? Consider 25–30 years, or a smaller second policy laddered on top.
- Don't rely on work coverage. Group policies are typically 1–2x salary and vanish when you change jobs — possibly when you're older or sicker. Own your base policy individually.
- Insure the stay-at-home parent too. Childcare and household replacement costs are real — $30,000–$60,000/year is a common estimate.
- Shop 3+ quotes. Pricing for identical coverage varies meaningfully between insurers, and each weighs health factors differently.
- Review at life events. New child, new house, divorce, big raise — each one moves your DIME number. Re-run this calculator in five minutes.
Life insurance is one pillar of the safety plan; a funded emergency fund handles the survivable disruptions, and a sound retirement drawdown plan covers the decades after the term ends.