Two families with identical $75,000 incomes can need wildly different life insurance — one has a paid-off house and grown kids, the other a fresh mortgage and two toddlers. That's why the classic "10× your income" rule is only a starting point.
The 10x rule: fast but blunt
Multiply gross income by 10 — $75,000 becomes $750,000 of coverage. It's better than guessing and catches the right order of magnitude, but it ignores debts, your spouse's income, existing savings, and how long your children need support.
DIME: the method planners actually use
- D — Debts: everything except the mortgage, plus ~$10k final expenses.
- I — Income: annual income × years your family needs it (commonly until the youngest is independent).
- M — Mortgage: the payoff balance, so housing is never at risk.
- E — Education: roughly $100k per child for in-state public college.
Add them up, subtract existing coverage and liquid savings, and you have a defensible number. A worked example: $15k debts + $75k × 10 years + $250k mortgage + $100k education = $1.115M, minus $50k existing = ~$1.07M of coverage — noticeably more than the 10x rule suggested. Run your own numbers in the life insurance calculator.
Term vs whole life, in one paragraph
Term insurance covers a fixed window (10–30 years) and costs roughly a tenth of permanent insurance for the same death benefit — a healthy 35-year-old might pay $30–50/month for $1M of 20-year term. For protecting dependents during your earning years, term wins almost every analysis; "buy term and invest the difference" remains the standard advice. Whole life mainly earns its cost in estate planning and special-needs situations.
When to recalculate
- New child, new home, or a big income change.
- Mortgage payoff or kids becoming independent (you may need less).
- Divorce or remarriage — beneficiaries and amounts both.