Insurance
DIME total
Adds the four need components before netting off existing resources.
The Formula
DIME = debts + income x years + mortgage + education
Adds the four need components before netting off existing resources.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Db | Debts | currency | Non-mortgage debts to clear. |
| I | Annual income | currency | Income to replace each year. |
| y | Years | years | Years of income replacement. |
| M | Mortgage | currency | Outstanding home loan. |
| E | Education | currency | Fund for schooling. |
What Each Symbol Means
Dbcurrency
Debts
Non-mortgage debts to clear.
Icurrency
Annual income
Income to replace each year.
yyears
Years
Years of income replacement.
Mcurrency
Mortgage
Outstanding home loan.
Ecurrency
Education
Fund for schooling.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate life insurance needs page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Life Insurance Needs, filed under Finance. Every number the guide produces comes from substituting into this one line.