Life Insurance Needs Calculator
How much coverage does your family actually need? This uses the DIME method — Debt, Income, Mortgage, Education — with present-value income replacement, then subtracts what you already have and estimates a realistic 2026 Canadian term premium.
What your coverage is for
The four DIME components plus final expenses that make up your total need.
Need vs. what you already have
Your total need, the coverage & assets that offset it, and the gap you should insure.
Illustrative 20-year term premiums
Typical 2026 Canadian monthly rates per $500,000 of healthy, standard-issue coverage. The highlighted row is closest to your profile.
| Profile | Per $500k /mo | Your coverage /mo | Per year |
|---|
Needs breakdown
Every line that goes into your total, and the offsets that reduce it.
| Component | Amount | Notes |
|---|
How this is calculated
The DIME method
Total need = Debt + Income replacement + Mortgage + Education + final expenses. Subtract existing life insurance, liquid savings, and the one-time CPP death benefit to get the gap you should insure. The hero figure rounds that gap up to the nearest $50,000 (policies are sold in round bands) and shows the exact number below it.
Income replacement — present value
A lump sum invested today can be drawn down over many years, so replacing $52,500/yr for 20 years does not require 20 × $52,500. With "present value" on, we discount the stream at a real 2% return (a conservative after-inflation rate the payout is assumed to earn) using the ordinary-annuity formula PV = A × (1 − (1 + r)−n) ÷ r. For A = $52,500, r = 2%, n = 20 that is A × 16.35 ≈ $858,450 — about 18% less than the raw $1,050,000. Turn the toggle off to use a simple income × replacement % × years figure instead.
Income multiple cross-check
The quick rule of thumb is 7–10× annual income. We show 10× so you can sanity-check the DIME result. DIME is usually more accurate because it reflects your real debts and your kids' ages; the multiple ignores both.
Premium estimate (illustrative only)
The table shows typical 2026 Canadian rates for a healthy applicant buying 20-year term, per $500,000 of coverage, scaled linearly to your gap. Your real premium depends on health, driving record, occupation, family history, and the insurer — get a quote. A 35-year-old non-smoking male runs roughly $35/mo per $500k; smokers pay about 3×, and rates rise ~8%/yr with age.
Term vs. whole life — buy term, invest the difference
Term life is cheap because it only covers the years you have a mortgage and dependents. The classic Canadian playbook is to buy enough term to close this gap and invest the premium savings in a TFSA/RRSP or FHSA. Whole and universal life cost far more and only make sense for narrow permanent needs: a lifetime tax bill on a business or cottage, estate equalization, or a special-needs dependent who will always require support.
Employer, spousal & stay-at-home coverage
Employer group life is usually only 1–2× salary, is not portable, and ends when you leave — treat it as a supplement, not your plan. Both partners should be insured, including a stay-at-home parent whose childcare and household work would cost $40k–$70k/yr to replace. This tool sizes one person at a time; run it once for each earner and caregiver.
What this doesn't model
CPP survivor's pension (varies by contribution history), a surviving spouse's ongoing income, group coverage that continues in retirement, or Quebec-specific products. It also ignores existing RESP balances against the education line, and RRSPs against liquid savings (they are taxable on death). Pair it with the RESP calculator and emergency fund calculator.