Life Insurance Calculator
Work out how much life cover your family actually needs, based on your income, debts, mortgage and children’s future costs — using the same DIME method advisers use.
How Much Life Cover Do You Need?
Fill in your details below and the calculator updates instantly. It adds together income replacement, outstanding debts, your mortgage, and an education fund for your children, then subtracts savings and cover you already have.
Your Recommended Cover
Updates automatically as you change the form
How This Calculator Works
This tool uses the DIME method, a widely used rule of thumb for estimating life cover. It stands for Debt, Income, Mortgage and Education, and adds each element together before subtracting anything you already have in place.
Debt and Final Expenses
Any non-mortgage debts your family would inherit, plus an allowance for funeral costs and administering your estate, are added first so nothing is left unpaid.
Income Replacement
Your annual income is multiplied by the number of years you’d want your family’s lifestyle supported, replacing the earnings that would otherwise stop.
Mortgage
Your full outstanding mortgage balance is included so your family could pay off the home in full and remain living there without that monthly cost.
Education
An education fund is added per child to cover schooling, university, or training, then existing savings and any life cover you already hold are subtracted from the total.
Term vs Whole of Life Insurance
Once you know how much cover you need, this comparison can help you decide which type of policy fits your situation.
| Feature | Term Life Insurance | Whole of Life Insurance |
|---|---|---|
| How it works | Pays out only if you die within a fixed term, e.g. 20 years. | Pays out whenever you die, as long as premiums are maintained. |
| Typical use | Covering a mortgage or the years children are dependent. | Funeral costs, inheritance tax planning, leaving a legacy. |
| Premiums | Generally lower, especially when taken out young. | Higher, and can increase if reviewed periodically. |
| Cash value | None — pure protection with no payout if you outlive the term. | Some policies build a small cash value over time. |
| Best for | Budget-conscious families matching cover to a specific need. | Guaranteed payout regardless of when death occurs. |
Life Insurance FAQ
Answers to the questions families ask most often when working out how much cover to buy.
A common starting point is 10 to 15 times your annual income, then adjusted for outstanding debts, your mortgage balance, and any future costs such as children’s education. The DIME method used in this calculator adds these figures together and subtracts any existing savings or cover you already hold.
DIME stands for Debt, Income, Mortgage and Education. It adds your non-mortgage debts, the number of years of income you want to replace multiplied by your salary, your remaining mortgage balance, and an estimated education fund for your children, then subtracts existing savings and life cover to reach a total recommended sum assured.
Term life insurance covers you for a fixed number of years and is usually the cheaper option, making it well suited to covering a mortgage or the years until children become financially independent. Whole of life insurance runs for your entire life and pays out whenever you die, which suits inheritance tax planning or funeral cost cover, but it typically costs more.
Yes, most advisers recommend including your full outstanding mortgage balance so that your family can remain in the family home mortgage-free if you die. This is separate from any mortgage protection policy the lender may have already asked you to arrange.