Meet the Life Insurance Needs Calculator: The DIME Method That Cuts Through the Sales Pitch
Life insurance is the only financial product you buy hoping you'll never use. It's also one of the most oversold — agents earn commissions of 50–100% of your first year's premium, which explains why so many people end up with more coverage (and more expensive coverage) than they need.
Alistair's Life Insurance Needs Calculator uses the DIME method — Debt, Income, Mortgage, Education — to calculate your actual coverage need. No commission. No sales pitch. Just the number.
The DIME Method
D — Debt (non-mortgage)
Everything you owe that isn't your house: car loans, credit cards, student loans, personal loans. Your policy should cover all of it so your family isn't stuck with payments.
I — Income Replacement
How many years of your income does your family need? The standard recommendation is 10 years. Multiply your annual gross income by the number of years. For a $100,000 earner with young kids: that's $1,000,000.
M — Mortgage
Your remaining mortgage balance. This ensures your family keeps the house without a payment burden.
E — Education
Estimated future college costs for your children. Even a rough number is better than nothing — $100,000 per child is a reasonable placeholder for in-state public university.
Minus Current Savings
Subtract what you already have: existing savings, investments, and any existing life insurance coverage. The remainder is your coverage gap.
Real Numbers: A 35-Year-Old Parent of Two
- Annual income: $100,000
- Years to replace: 10 → $1,000,000
- Non-mortgage debt: $25,000 (car + credit cards)
- Mortgage: $250,000
- Education costs: $200,000 (two kids at $100K each)
- Current savings: $50,000
- Existing coverage: $0
Total DIME need: $1,000,000 + $25,000 + $250,000 + $200,000 = $1,475,000 Minus savings: $1,475,000 - $50,000 = $1,425,000 coverage gap
The tool also estimates the monthly premium for a term life policy at this coverage level. For a healthy 35-year-old, a 20-year $1.5M term policy typically runs $50–$70/month. Compare that to whole life insurance, which might run $800–$1,200/month for the same face amount — and the agent's motivation for pushing whole life becomes clear.
Adjusting the Variables
Not everyone needs 10 years of income replacement. If your youngest child is 16, you might only need 2–3 years. If both parents work, you might need less (the surviving parent still has their income). The tool lets you adjust every variable to your situation.
Why You Can't Trust the Sales Pitch
Insurance agents use "needs analysis" tools provided by their companies. These tools are designed to show a larger number than the DIME method — by including things like "final expenses" (funeral costs), "emergency fund for survivors," and "college at private university rates." Every additional line item increases the sale.
A $1,000,000 policy earns the agent roughly $5,000–$10,000 in commission. A $500,000 policy earns half that. Guess which one the tool recommends.
Alistair uses the DIME method because it's transparent: four numbers you understand, minus what you already have. No mystery, no upsell.
That's what this microtool does. Get your actual number — then shop for term life on your terms.