Question 1

What is the DIME method?

Accepted Answer

DIME stands for Debt, Income, Mortgage, and Education. It is a straightforward way to estimate how much life insurance you need by adding up your outstanding debts, the income your family would need to replace, your mortgage balance, and future education costs for your children.

Question 2

How much life insurance do I need?

Accepted Answer

The amount depends on your financial obligations and goals. Common rules of thumb suggest 10-15 times your annual income, but the DIME method provides a more personalized estimate by accounting for your specific debts, mortgage, income replacement needs, and education funding goals.

Question 3

Term vs whole life insurance

Accepted Answer

Term life insurance provides coverage for a specific period (10, 20, or 30 years) and is typically much more affordable. Whole life insurance covers you for your entire life and includes a cash value component, but premiums are significantly higher. Most financial advisors recommend term life for the majority of families.

Question 4

When should I review my coverage?

Accepted Answer

You should review your life insurance coverage after major life events such as getting married, having a child, buying a home, changing jobs, paying off significant debt, or reaching a milestone birthday. It is generally a good idea to review your coverage every 2-3 years.

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