Life Insurance Needs Calculator

ExampleIncome $85,000 · Spouse income $45,000 · Mortgage $350K · 2 children · $100K existing coverage

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🛡️Life Insurance Needs

Coverage gap · Ontario · DIME+

$717,824total need $867,824 · $150,000 existing
Income basis after-tax·Suggested term 19 yr·⚠ Coverage may be employer group only (1–2× salary)

Income (I)

$294,824

15 yr replacement

Debt + mortgage

$365,000

D + M

Education (E)

$160,000

per child costs

Term estimate

~$115/mo

19-yr term · age 35

💰Income
Your Annual Income (gross)?
$
Spouse Annual Income (gross)
$
Income replacement years
yrs
Your age?
yrs
🏠Debts (D + M)
Mortgage balance
$
Other debts?
$
👨‍👩‍👧‍👦Family (E)
Number of children
Youngest child age?
yrs
Education per child?
$
Existing RESP balance?
$
🛡️Resources & buffers
Final expenses?
$
Monthly household expenses
$
Current life insurance?
$
Liquid savings
$
📊DIME+ Breakdown
Income$294,824
Debt$15,000
Mortgage$350,000
Education$160,000
Emergency (6 mo)$33,000
Final expenses$15,000
Total needs$867,824
Existing resources−$150,000
Coverage gap$717,824
💵Estimated term premiums
Estimates for age 35, non-smoker, healthy. Get actual quotes - rates vary by insurer and health.
19-year term (suggested)~$115/mo
10-year term~$79/mo
Employer group coverage detected
Your existing coverage ($100,000) looks like 1–2× salary group life. It ends when you leave the job and may not convert at the same rate. Personal term fills the gap.
📐The DIME Method
D
Debt
Non-mortgage liabilities - car loans, credit cards, lines of credit.
I
Income
Replace after-tax earnings for enough years that dependents become self-sufficient.
M
Mortgage
Full remaining mortgage balance so your family can stay in the home.
E
Education
Post-secondary costs minus any RESP already saved (~$80k–$100k per child).
DIME+ in Canada
Add final expenses and a 6-month emergency buffer. Subtract group life, RESP, and liquid savings. Review every 2–3 years.
💡Term vs Whole Life▼
🔗Related Calculators▼

What's Next?

RESP & CESG$2,500/yr gets $500 free from OttawaCanada Child BenefitMonthly CCB for your familyBudget PlannerFit premiums into your monthly budget

DIME+ estimates only - not a quote or recommendation. Consult a licensed advisor. Disability insurance is often a higher-probability need than life insurance.

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About this calculator

Updated April 2026

This life insurance calculator uses the DIME formula (Debt + Income × 10 + Mortgage + Education) to estimate how much coverage your family actually needs - separate from what an insurance sales rep quotes. It's the quickest way to see if you need $500k or $2M in term coverage, and whether your group benefits at work are enough on their own (they're almost never).

What you can do with it

  • Size a term policy that covers the full DIME formula gap.
  • Check if employer group life (1–2× salary) is enough for your family.
  • Compare 20-year vs 30-year term premiums at your age.
  • Calculate the cost difference between term and whole life (usually 5–15×).

How the math works

DIME coverage = outstanding debt + (annual after-tax income × 10 years) + mortgage balance + estimated education costs for each child. The calculator subtracts existing coverage (group + personal) to show the gap. Term premium estimates use age, sex, and smoker status from 2026 Canadian life insurance rate tables.

Canadian context - 2026

A healthy non-smoking 35-year-old in Canada can typically get $750,000 of 20-year term for $25–$35/month. Smokers and applicants over 45 pay 2–4× more. Group life coverage usually ends when you leave the employer and can't be converted at the same rate.

Frequently asked questions

How much life insurance do I need in Canada?

Common methods include the DIME formula (Debt + Income replacement × 10 years + Mortgage + Education) or the income multiple approach (10–12× gross income). The right amount depends on your debts, dependants, existing assets, and income replacement needs. This calculator uses the DIME method as a starting point.

Term vs whole life insurance: which is better for most Canadians?

Term insurance covers a specific period (10, 20, or 30 years) at lower cost and is recommended for most families needing income replacement or mortgage coverage. Whole/permanent life builds cash value but costs 5–15× more in premiums. Most financial planners recommend term + investing the premium difference.

Does group life insurance through work replace personal coverage?

Group coverage (typically 1–2× salary) is a valuable supplement but usually insufficient. It also ends when you leave the employer. Personal term insurance is portable and locks in your health rating when you are young and healthy.

Go deeper - related guides

Long-form explainers that pair with this calculator.