![The Dime Method The Dime Method](https://mlifefinance.com/wp-content/uploads/2019/04/The-Dime-Method.jpeg)
The Dime Method
Many people buy policies worth $100,000, $200,000, or $300,000, but that may not be enough. The DIME method offers an easy formula to calculate your life insurance protection need.
How To Calculate Your Protection | |
Example of a hypothetical case | |
Debt | $50,000 (Combined credit cards, loans, and other debts) |
Income | $36,000 ($3k/Mo ($36k/Yr.) income replacement for 10 years) |
Mortgage | $200,000 (Mortgage Balances) |
Education | $120,000 (Assuming $15k/yr. for a 4-years college for 2 kids) |
Total | $730,000 Protection Needs |
Most people have good protection on their house and cars, but few have enough for their loved ones. |
With $730,000 of insurance protection, if this person dies too soon, the surviving spouse will have enough money to pay off $50,000 of debt, continue to have $3,000 income per month for 10 years or more, pay off the remaining $200,000 of their mortgage, keep the house, and still have $120,000 saved up for the 2 kids when they are ready for college.
The good news is with the DIME method you will know how to calculate your insurance need. The bad news is many will realize they don’t have enough protection for their family.
According to the Life Insurance and Market Research Association (LIMRA), only 44% of U.S. households have individual life insurance, and the coverage is often not enough.
People say, “I already have life insurance!”
They may, but the real question is do they have enough?
How would you feel if your $300,000 house burns to the ground and when you fill a claim, your insurer tells you that you only have $50,000 worth of coverage? That normally wouldn’t happen because your bank always makes sure you have $300,000 of protection.
What about your life and if you pass away?
How would your spouse and kids feel when they receive a check for $100,000? After expenses, they may be left with very little and face a bleak future.
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