I Have 3+ Kids! How Much Life Insurance Do I Need?
Some of the main reasoning behind the purchase of life insurance amongst adults are to protect their children financially. The amount that should be purchased varies depending on the amount of children in a family, which will be discussed in this article!
Formula For The Amount of Life Insurance Needed
There are many ways to calculate how much coverage you need when deciding which term life plan is right for you. The best way to calculate this is through following the DIME formula, which takes into account your children, especially under the “E.”
The Breakdown Of DIME
Debt and Final Expenses: Add up debts not including your mortgage, plus funeral expenses
Income: Your annual income multiplied by the amount of years your family/beneficiaries would need support
Mortgage: The amount of mortgage you need to pay off
Education: The estimated cost of sending your kids to school and college
DIME Applied to # of Children
When it comes to the amount of children that you need to support, the main letter in the acronym that helps your children is the “E.” If you have more than two children, the education cost would double. Three children, the cost would triple, and so on. This is a great way to figure out specifically how to help support your child in the unfortunate event that you would not physically be there to help them.
