How much life insurance do I need?
Answered by Cheryl Heikka
Financial Strategist · Your One Agency
Start from the number, not the product. The method is DIME - add up your Debt, Income (times the number of years your family would need it replaced), Mortgage, and Education costs for your kids, then subtract savings and any coverage you already have. A common rule of thumb lands around 10x annual income, but DIME gets you closer to your real number. The point is working backward from what your family would actually need to keep their life intact, not picking a round policy amount. Many people underestimate this: more than 100 million American adults, a record 42%, say they need life insurance or need more of it. (LIMRA Insurance Barometer)
The gap most people miss
Most people carry a policy sized to a premium they were comfortable with, not to the number their family would actually need - and many underestimate that number.
A quick coverage gap check runs your DIME number against what you have now.