Last updated: 2026 assumptions reviewed. Assumptions & sources
Tools & Resources

Life Insurance Needs Calculator

Most people are underinsured. Find out how much coverage you actually need using the DIME method, the most reliable framework for calculating life insurance.

D

Debt

Everything that would need to be paid off immediately

$
$
$
$
$
Average funeral in Canada: $10,000–$15,000. Estate lawyer fees, probate, executor costs can add another $5,000–$20,000.
I

Income Replacement

Your family's income need if you're gone

$
years
Until youngest child is independent, or until your spouse could fully support themselves. 20 years is a common starting point.
$
This reduces the income replacement needed. Leave at $0 if not applicable.
M

Mortgage

Outstanding balance to be paid off

$
E

Education

Future education costs for your children

$
Average 4-year university in Canada (tuition + living): $60,000–$100,000. Adjust for your situation and existing RESP savings.
$

Existing Coverage & Assets

$
Include employer group coverage (typically 1–2x salary) and any private policies.
$
RRSP, TFSA, savings that your family could access. Home equity excluded. They'd need somewhere to live.

Your Coverage Recommendation

D Debt & final expenses $0
I Income replacement $0
M Mortgage payoff $0
E Education fund $0
Total need $0
Less existing coverage & assets $0
Coverage gap $0

The DIME Method

DIME is a framework for calculating life insurance needs:

  • D: Debt. All outstanding debts plus final expenses
  • I: Income. Years of income your family would need
  • M: Mortgage. Full remaining balance
  • E: Education. Future costs for your children

Total DIME less existing coverage and liquid assets = your coverage gap.

Term vs. Permanent

For most families with a mortgage and young children: term life insurance is the right answer. It's affordable, straightforward, and provides maximum coverage during the years you need it most. A 20-year term covers your mortgage and income replacement period for a fraction of the cost of whole or universal life.

What this doesn't calculate

This calculator gives you a solid starting number. It doesn't account for: investment returns on a lump-sum payout, inflation over time, specific tax treatment of death benefits (generally tax-free in Canada for named beneficiaries), or your spouse's CPP survivor benefit. A licensed insurance advisor can refine these numbers for your situation.

Frequently Asked Questions

How much life insurance do I need in Canada?

A common rule of thumb is ten to twelve times your annual income. But a better approach considers your specific obligations: outstanding mortgage balance, years of income your family would need, children's education costs, and any other debts. The goal is to replace your income long enough for your family to stabilize.

What is the difference between term and whole life insurance?

Term insurance covers you for a fixed period (10, 20, or 30 years) and pays a benefit only if you die during that term. It is affordable and straightforward. Whole life insurance covers you permanently and includes a savings component, but it costs significantly more. Most financial planners recommend term life for income replacement during the earning years.

When do I need life insurance?

When other people depend on your income. If you are single with no dependents, you likely need very little. Once you marry, and especially once you have children or take on a mortgage, the need becomes significant. The younger and healthier you are when you buy, the lower the premium will be for the rest of the policy term.

Does my employer provide enough life insurance?

Employer group life insurance typically provides one to two times your salary. That is a start but usually falls far short of what a family needs. It also disappears if you change jobs. Most financial planners recommend personal term life insurance in addition to whatever your employer provides.

How does life insurance relate to Christian stewardship?

Term life insurance is one of the most direct ways a man can love his family. It says: if I am gone, you are not left without. It is not a trust issue with God. It is responsible stewardship of the resources God has entrusted to you, extended beyond your lifetime. A man who has dependents and no life insurance has made a choice, even if he has not thought of it that way.