US life insurance planning with DIME
The DIME framework calculates coverage by aggregating Debt, Income replacement, Mortgage balance, and Education costs, then subtracting liquid assets.
In the United States, term life insurance policies are available in 10, 20, or 30-year level benefit terms to protect dependents during peak obligation years.
Worked example: US household coverage
A US earner with $65,000 income seeking 10 years protection ($650,000), a $220,000 mortgage, $15,000 consumer debt, $50,000 college fund, $9,000 funeral cost, and $30,000 savings requires $914,000 in term life insurance coverage.
Inputs for the life insurance US calculator
Annual Net Earnings
Take-home pay your household depends on to meet recurring monthly expenses.
Replacement Duration
Years of income replacement until dependents become self-supporting.
Mortgage Debt
Principal balance required to satisfy your residential mortgage.
Other Liabilities
Auto loans, student loans, and credit card balances to clear.
College Fund
Projected higher education and 529 plan savings needed for children.
Final Expenses
Estimated funeral and estate administrative expenses in the US.
Liquid Reserves
Bank accounts, taxable investments, and accessible savings.
Existing Coverage
Group life insurance through your employer or existing individual policies.
CALCULATOR QUESTIONS
US life insurance calculator questions
Are life insurance death benefits taxable in the US?
In general, life insurance death benefits paid to beneficiaries are not included in gross income and are free from federal income tax.
Is employer-provided group life insurance enough?
Most employer plans provide 1 to 2 times your base salary, which is rarely sufficient for families with children or a mortgage.