In today’s chat, we’re discussing life insurance needs for parents with college-aged children. Let’s hear about James and Linda’s situation.

Story:
James and Linda are in their early 50s, with two kids in college. James works as an executive, earning $90,000 a year, and Linda runs a small business, making $30,000. They have a $150,000 mortgage and $5,000 in credit card debt. Their main concern is ensuring their kids finish college without financial worries if something were to happen to either of them.

Understanding the DIME Method:
The DIME method is a strategic approach to calculating life insurance needs, covering four critical areas: Debt, Income, Mortgage, and Education. This method helps ensure that your family’s financial needs are met if something happens to you.

Solution Using DIME Method:

• Debt: $5,000 to cover credit card debt.
• Income: They decide to replace James’s income for 5 years ($90,000 x 5 = $450,000) and Linda’s income for 5 years ($30,000 x 5 = $150,000).
• Mortgage: $150,000 to pay off the mortgage.
• Education: $100,000 to cover remaining college costs.

Funeral Expenses:

• $20,000 to cover funeral costs.

Total Insurable Amount: $775,000

Summary and Best Options:
James and Linda might benefit from a term life insurance policy that lasts until their mortgage is paid off and their children finish college. If they want to leave a legacy or cover estate taxes, a permanent life insurance policy might be a better option.

James and Linda can rest easy knowing their children’s education won’t be disrupted. If you’re in a similar situation, schedule a call with us today for a free consultation. We’ll help you determine the right coverage 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.