ExampleIncome $85,000 · Spouse income $45,000 · Mortgage $350K · 2 children · $100K existing coverage
Premium estimates are rough approximations for healthy non-smokers aged 30–40. Actual quotes vary by age, health, smoking status, and insurer. The DIME method is a starting framework - consult a licensed insurance advisor for your specific situation. Not financial advice.
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This life insurance calculator uses the DIME formula (Debt + Income × 10 + Mortgage + Education) to estimate how much coverage your family actually needs - separate from what an insurance sales rep quotes. It's the quickest way to see if you need $500k or $2M in term coverage, and whether your group benefits at work are enough on their own (they're almost never).
DIME coverage = outstanding debt + (annual after-tax income × 10 years) + mortgage balance + estimated education costs for each child. The calculator subtracts existing coverage (group + personal) to show the gap. Term premium estimates use age, sex, and smoker status from 2026 Canadian life insurance rate tables.
A healthy non-smoking 35-year-old in Canada can typically get $750,000 of 20-year term for $25–$35/month. Smokers and applicants over 45 pay 2–4× more. Group life coverage usually ends when you leave the employer and can't be converted at the same rate.
Common methods include the DIME formula (Debt + Income replacement × 10 years + Mortgage + Education) or the income multiple approach (10–12× gross income). The right amount depends on your debts, dependants, existing assets, and income replacement needs. This calculator uses the DIME method as a starting point.
Term insurance covers a specific period (10, 20, or 30 years) at lower cost and is recommended for most families needing income replacement or mortgage coverage. Whole/permanent life builds cash value but costs 5–15× more in premiums. Most financial planners recommend term + investing the premium difference.
Group coverage (typically 1–2× salary) is a valuable supplement but usually insufficient. It also ends when you leave the employer. Personal term insurance is portable and locks in your health rating when you are young and healthy.
Long-form explainers that pair with this calculator.