D
Debt
Consumer debt and personal loans that should not fall to your family. Keep the mortgage separate to avoid counting it twice.
Where are you planning?
Your DIME inputs
All amounts in CAD
Income your household would need to replace
A planning horizon, not a fixed rule
Credit cards, lines of credit, car or student loans
Current amount still owing
Your intended contribution for all children
Include resources you intend to use for these needs
Optional term-length guide
Add the remaining time on major obligations. These fields do not change the coverage amount.
Debt+Income × years+Mortgage+Education−Existing resources
Canada context: DIME uses your own household figures rather than a national average. When refining income needs, compare your budget with Statistics Canada’s household-spending data, and verify any CPP/QPP survivor benefits before subtracting them.
US context: DIME uses your own household figures rather than a national average. BLS household-spending data and Census income data can help pressure-test a budget; verify estimated Social Security survivor benefits before subtracting them.
DIME, explained
DIME is a needs-based framework—not a quote or policy recommendation. It turns four large financial responsibilities into a visible total, then subtracts Canadian resources already earmarked for the same job.
I
Income
Annual income multiplied by the number of years your household may need support. Adjust for a partner’s income and changing expenses.
M
Mortgage
The outstanding balance, if paying it off is part of your plan. Some households may instead budget ongoing payments.
E
Education
The amount you want available for tuition, books, housing, or other training—not an assumed national average.
How much is “enough”?
Enough means the coverage supports the plan your household would actually follow. The calculator gives you a starting number; the next step is to pressure-test the assumptions.
- Decide whether income replacement should use gross or after-tax household needs.
- Add final expenses, childcare, caregiving, or business obligations if relevant.
- Confirm which savings are truly available, whether workplace coverage can change with employment, and whether CPP/QPP survivor benefits may apply.
- Review each partner separately—even unpaid household work has a replacement cost.
- Revisit beneficiaries and coverage after major family or financial changes.
Term vs. whole vs. universal life in Canada
The right structure depends on whether the need is temporary or lifelong, the guarantees you want, and the premium you can sustain. Coverage amount and policy type are separate decisions.
Term life
Coverage for a fixed period or to a set age. It generally starts with lower premiums than permanent insurance and normally has no cash value.
- Often compared for
- Income replacement, mortgages, dependent years
- Watch for
- Renewal costs, expiry age, conversion options
Whole life
A form of permanent insurance designed for lifetime coverage while the policy remains in force. Premiums do not rise with age, and policies often include a guaranteed minimum cash value.
- Often compared for
- Lifelong or estate-planning needs
- Watch for
- Higher cost, guarantees, surrender values, policy loans
Universal life
Permanent coverage combined with an investment account. Values can change with investment choices and returns; premiums may need adjustment if performance is weaker than expected.
- Often compared for
- Complex lifelong protection and investment flexibility
- Watch for
- Fees, assumptions, funding risk, tax and estate advice
Common planning mistakes
A large round number can still miss the point. Better estimates come from clear assumptions that your household can explain and update.
Using only a salary multiple
A multiple may miss mortgage, education, debt, childcare, and resources already in place.
Counting the mortgage twice
Keep it out of the general debt field when you enter it in the mortgage field.
Ignoring a stay-at-home partner
Childcare, transport, household management, and caregiving can be costly to replace.
Relying only on workplace coverage
Confirm the amount, limits, beneficiary rules, and what happens if employment ends.
Choosing a term by habit
Compare the term end date with the mortgage payoff, dependent years, and income horizon.
Buying an unaffordable policy
Coverage only helps while it remains in force. Consider whether premiums are sustainable.
Ready to compare providers?
Independent insurer and broker comparison links are being prepared.
Questions Canadians ask
What does DIME stand for in life insurance?
DIME stands for Debt, Income, Mortgage, and Education. Add those needs, then subtract existing insurance and savings intended to cover them.
Is the life insurance death benefit taxable in Canada?
The Financial Consumer Agency of Canada describes the life insurance death benefit as a one-time, tax-free payment to beneficiaries. Estate and policy structures can be complex, so get professional advice for your situation.
Should I subtract CPP or QPP survivor benefits?
Only after checking likely eligibility and amounts for your family. Government survivor benefits may cover part of a need, but they are not a substitute for calculating your household’s full obligations.
Should I subtract Social Security survivor benefits?
Only after checking likely eligibility and amounts for your family. Social Security may provide monthly survivor benefits to eligible spouses or children, but the amount depends on the worker’s record and family circumstances.
Does the calculator account for US federal or state tax?
No. It estimates obligations in today’s dollars and does not model income, estate, or state tax consequences. Ask a licensed advisor and qualified tax professional about your policy and estate structure.
Should I use gross or net income?
There is no single answer for every household. Gross income is easy to enter but can overstate spending needs; a detailed after-tax household budget may be more precise. Be consistent and document what the replacement amount must fund.
How do I choose a term length?
Start with the longest major temporary need: years until the mortgage is paid, the youngest child is independent, or income support is no longer needed. Compare available policy terms around that horizon and review renewal and conversion provisions.
Does this calculator include funeral or final expenses?
Not as a separate field. Add them to outstanding debts if you want them included, along with any legal, tax, or estate-settlement amount you expect.
Should I subtract my workplace life insurance?
Only if you understand the amount, eligibility, portability, and whether the coverage is expected to remain in place. Employment-based coverage may change when you change jobs or retire.
Sources & further reading
Canada
- Financial Consumer Agency of Canada — Understanding life insurance (benefits, beneficiaries, term and permanent policy basics).
- CLHIA — Canadian Life & Health Insurance Facts, 2025 edition (industry terminology).
- Government of Canada — CPP death benefit and related survivor benefits.
- Statistics Canada — How Canadian households spent their money in 2023.
United States
- US Social Security Administration — Survivors benefits: protection for your family.
- US Bureau of Labor Statistics — Consumer expenditures in 2024.
- US Census Bureau — Income, poverty, and health insurance coverage in 2024.
- LIMRA — Closing the life insurance coverage gap (US industry research).
- NAIC Life Insurance Buyer’s Guide (policy types and buyer considerations).
Educational estimate only. This calculator is not insurance, tax, legal, or financial advice and does not recommend a product or coverage amount. Speak with an appropriately licensed insurance advisor in your province, territory, or state and, where appropriate, a qualified financial, legal, or tax professional.