DIME Method
A rule of thumb for estimating life insurance needs: Debt, Income, Mortgage, Education.
What You Need to Know
The DIME method adds up four buckets:
- Debt: Credit cards, loans, final expenses
- Income: Replacement for the years your family relies on your paycheck
- Mortgage: Remaining balance
- Education: Future tuition costs for children
Summing these totals gives a quick baseline for how much coverage to purchase.
Sources & References
This information is sourced from authoritative government and academic institutions:
- naic.org
https://www.naic.org/documents/consumer_guide_life_insurance.pdf
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
Related Terms in Healthcare & Insurance
ADLs (Activities of Daily Living)
Six basic self-care tasks—like bathing and dressing—that determine long-term care eligibility.
Any Occupation
Disability coverage that only pays benefits if you cannot work in any reasonable job based on your experience and education.
Assisted Living
Housing for people who need help with daily tasks but not round-the-clock medical care.
Beneficiary
The person, trust, or organization that receives the life insurance payout.
Benefit Period
How long your disability insurance will pay benefits once a qualifying claim is approved.
Cash Value
The savings component inside certain permanent life insurance policies.