How Much Life Insurance Do You Really Need? Life insurance is not just about replacing income — it’s about protecting your family’s financial future. But how do you figure out how much coverage is enough? In this guide, we’ll help you calculate the right amount for your stage in life, budget, and goals. What Does Life Insurance Actually Cover? Lost income for dependents Mortgage and rent payments Children’s education costs Funeral and medical bills Outstanding debts or credit cards The DIME Method A popular way to estimate your life insurance needs is the DIME formula: D ebt: How much do you owe? I ncome: Multiply your annual income by 5–10 years M ortgage: Outstanding balance on your home E ducation: Future college or school costs for your children Example: If you earn $60,000/year, owe $100,000 on your home, and want to cover $100,000 in education, you may need $500,000–$700,000 in life insurance. Common Coverage Ranges Single with no kids: $100K–$250K (to cover...