How to determine the coverage amount someone needs (1)

DIME Method

DIME is an acronym that stands for Debt, Income, Mortgage, and Education expenses. Basically, you add the expenses in each category to get your base life insurance number.


I=Income (multiplied by the number of years you want to replace your income)

M=Mortgage Balance

E= Education (future needs such as college costs for kids)

On average, the sum of all these numbers is the amount of Life Insurance the Insured needs.