Why relying on a formula could leave your family unprotected and what to do instead.
If you’ve ever searched online for how much life insurance you need, you’ve likely come across the D.I.M.E. formula. It stands for Debt, Income, Mortgage, and Education — a simple method designed to give you a rough estimate for your coverage needs. Sounds smart, right?
But here’s the problem: your life isn’t a formula. And using D.I.M.E. could mean getting a policy that either leaves your family underinsured or locks up your money in a plan that doesn’t work for you long term.
Let’s talk about why I don’t recommend D.I.M.E. as a guide — and what smarter, more strategic steps you can take instead.
1. What Is the D.I.M.E. Formula — and Why People Like It
D.I.M.E. stands for:
- Debt: Cover your existing personal debts (like credit cards or car loans)
- Income: Multiply your annual income by the number of years your family will need support
- Mortgage: Pay off your home loan in full
- Education: Set aside future college costs for your children
It’s easy, fast, and gives people a number to work with — and for many, that’s the appeal. It creates a sense of control. But what it really does is treat your future like a spreadsheet instead of a strategy.
2. The Real Problem with D.I.M.E.
While D.I.M.E. might give you a quick number, it doesn’t tell the whole story.
- It’s one-size-fits-all: It assumes everyone’s goals, risks, and financial plans are the same. They’re not.
- It ignores living benefits: What if you get sick and can’t work? What if you want access to your policy’s value while still alive? D.I.M.E. doesn’t plan for that.
- It leaves out inflation and taxes: College costs aren’t flat. Mortgage interest and medical costs aren’t fixed. But D.I.M.E. treats them like they are.
- It defines you by your bills: You are not just your debts or expenses. You are your dreams, your legacy, and your potential.
Bottom line: D.I.M.E. is a shortcut. But when it comes to your financial future, shortcuts cost more than they save.
3. A Smarter Way to Plan Your Insurance
The right approach begins with a personalized strategy, not a generic formula. Here’s what that looks like:
- Start with a real Financial Needs Analysis (FNA): This includes your age, health, lifestyle goals, retirement plan, family structure, and what kind of future you want for yourself and your loved ones.
- Explore modern tools like Indexed Universal Life (IUL):
- Offers lifetime protection
- Grows tax-deferred cash value
- Comes with living benefits like critical illness or chronic care riders
- Allows you to build wealth while staying insured
- Think beyond protection — think growth: Don’t just focus on covering expenses. Use insurance to also build your legacy and protect your retirement.
4. What to Do Instead — Use Strategy, Not Shortcuts
If you’re shopping for life insurance, don’t just plug numbers into an online calculator and hope for the best. You deserve a strategy that’s tailored to your life — and that starts with a real conversation.
- Book a free consultation at IULPolicy.com/book
- Get a quote based on you — not just your debt
- Learn how an IUL can provide lifetime protection and cash value
- Ask questions. Get clarity. Start a real plan.
and lastly,
Your family’s future is too important to leave to a formula. The D.I.M.E. method might give you a number — but it won’t give you peace of mind. A personalized strategy can.
Don’t just buy life insurance. Plan it. Own it. Grow from it.
