Tool 15 · Life insurance
Cover that protects the people you love.
Life insurance replaces your income and clears your debts if you're no longer there to provide. This calculator uses the well-known DIME approach — Debt, Income, Mortgage, Education — to turn "how much cover?" into a clear number.
to replace $0 of income and clear what you owe.
Pro features. Add a return assumption for a more realistic present-value figure, plus education and final-expense costs, insights, a full breakdown and exports.
Refine the cover
Refine the model
Invested, a lump sum earns interest — so it needs to be smaller than the raw income total.
A future lump sum for school or university, if you want cover to include it.
Funeral, estate and administration costs your family shouldn't have to fund.
What the cover is made of
Compare years of income replaced
| Years replaced | Income part | Recommended cover |
|---|
How much life insurance do you actually need?
Life insurance exists to answer one hard question: if your income disappeared tomorrow, would the people who depend on you be financially secure? The right amount of cover isn't a round number plucked from an advert — it's whatever it would take to replace what you provide. Too little leaves your family exposed; too much means paying premiums for protection nobody needs. This calculator gives you a defensible starting figure using the DIME method, a simple framework advisers have used for decades.
DIME stands for the four things good cover should account for: Debt (loans, credit cards and other obligations that would otherwise fall to your family), Income (the years of earnings your household would need to replace), Mortgage (usually the biggest debt, so it gets its own letter), and Education (the future cost of raising and schooling children). Add those up, subtract what you already have in cover and savings, and the gap is roughly what you need. Our tool folds debt and mortgage into one "debts to clear" figure to keep it simple, and lets Pro add an education fund and final expenses.
The single biggest driver is income replacement: how many years of your salary your family would need, and whether you count it as a raw total or as a smarter present-value lump sum. A payout doesn't sit in a drawer — invested sensibly, it earns a return while it's drawn down, so a smaller amount can fund the same number of years. Switch on the Pro return assumption to see that more realistic (usually lower) figure.
A worked example
€45,000 income · replace 15 years · €180,000 debts · €50,000 already covered
Replacing €45,000 for 15 years is €675,000 of income need. Add €180,000 of debts and the total need is €855,000; subtract the €50,000 you already have and the recommended cover is about €805,000. Turn on a 3% return assumption and the income part shrinks to roughly €540,000 (its present value), bringing the recommendation down to around €670,000 — still enough, but cheaper to insure.
Things to keep in mind
- Term insurance is usually enough. For most families, straightforward term cover — protection for a set number of years, with no investment element — gives the most protection per euro. Be wary of complex "whole of life" products sold as investments.
- Match the term to the need. Cover the years your family is actually dependent: until the mortgage is gone and the children are grown. Insuring far beyond that wastes money.
- Both parents have value. A stay-at-home parent provides childcare and household work that would cost real money to replace. Don't insure only the salaried earner.
- Count what you already have. Employer "death in service" cover, existing policies and liquid savings all reduce the gap — include them so you don't over-insure.
- Review it after big life events. A new child, a new mortgage, a pay rise or a divorce all change the number. Re-run it every few years.
Frequently asked questions
Is "10× your income" a good rule?
It's a rough shortcut, and often in the right ballpark, but it ignores your actual debts, how many years of dependency remain, and what you already have. The DIME approach here is more tailored — compare its answer to 10× your income as a sanity check.
What's the difference between term and whole-of-life?
Term cover pays out only if you die within a set period and is cheap, because most policies never pay. Whole-of-life covers you whenever you die and costs far more, often bundling an investment. For pure family protection, term is usually the better value.
Should cover include the mortgage?
Yes — clearing the mortgage is often the single most valuable thing a payout does, letting your family stay in their home. Include the outstanding balance in "debts to clear".
Why does the return assumption lower the figure?
Because a lump sum can be invested and earn interest while your family draws an income from it. The present value of 15 years of income at a 3% return is less than 15 × one year, so you need to insure a smaller amount.
Does this replace advice from an insurer or adviser?
No. It's an educational estimate to help you go into that conversation informed. A regulated adviser can factor in your health, tax situation and the specific products available to you.