Today, we’re diving into life insurance needs for families with young children. Meet Mark and Sarah, who are thinking about their children’s future.

Story:
Mark, 40, and Sarah, 38, have been married for 10 years and have two energetic kids, ages 5 and 7. Mark works in finance, earning $70,000 a year, while Sarah works part-time as a teacher, making $30,000. They have a $250,000 mortgage and about $15,000 in credit card debt. With their kids’ future in mind, they’re concerned about what might happen if one of them were no longer around to support the family.

Understanding the DIME Method:
The DIME method helps families determine their life insurance needs by considering Debt, Income, Mortgage, and Education expenses. This method ensures that your family is financially secure if something happens to you.

Solution Using DIME Method:

• Debt: $15,000 to cover credit card debt.
• Income: They decide to replace Mark’s income for 10 years ($70,000 x 10 = $700,000) and Sarah’s income for 10 years ($30,000 x 10 = $300,000).
• Mortgage: $250,000 to pay off the mortgage.
• Education: $200,000 to cover college costs for both children.

Funeral Expenses:

• $20,000 to cover funeral costs.

Total Insurable Amount: $1,485,000

Summary and Best Options:
For Mark and Sarah, a term life insurance policy that extends through their children’s college years and until the mortgage is paid off would be ideal. Alternatively, they could consider a permanent life insurance policy for lifelong coverage for themselves as well as their children, which could also build cash value.

Mark and Sarah can now focus on raising their children, knowing they’re financially protected. If you’re in a similar situation, schedule a call with us today for a free consultation. We’ll help you calculate your life insurance needs using the DIME method.

Disclaimer:
This example is for illustration purposes only. Each person’s life insurance needs are different and require a personalized assessment.