A needs-based framework — not a fear-based sales pitch.
Most people either have too little, too much, or the wrong type of life insurance. The right answer starts with a question: who would be financially harmed if you died?
The Situation
Life insurance exists for one purpose: to replace the financial support you provide to people who depend on it. If no one depends on your income — no children, no partner relying on your earnings, no co-signed debts — life insurance may not be necessary at all. If multiple people depend on your income for their daily lives, the need is significant and immediate.
Life insurance is not about your death. It is about the financial lives of the people who survive you.
— Worthune Decision Framework
The Need Assessment · Steps 1 & 2
Partner who earns less or doesn't work, children, aging parents you support financially. If any of these depend on your income for daily living, you have a life insurance need. If none do, the case for coverage is significantly weaker.
Dependents determine the needDIME method: Debt (all outstanding balances) + Income replacement (annual income × years until youngest dependent is independent) + Mortgage (full payoff amount) + Education (projected costs for each child). This sum is a comprehensive coverage target that replaces your complete financial contribution.
DIME method captures the full obligationTerm vs Permanent · Steps 3 & 4
Term life covers a specific period (10, 20, or 30 years) at a fixed premium. It is designed to protect dependents during the period of maximum financial obligation — while children are young, while the mortgage is large, while income replacement matters most. For most families, term is the appropriate and most cost-effective choice.
Term covers the obligation periodWhole life, universal life, and variable life policies provide lifetime coverage with a cash value component. They are significantly more expensive than term. For most people, buying term and investing the premium difference produces better outcomes than permanent life — but specific estate planning situations may warrant permanent coverage.
Permanent is rarely the right defaultCoverage Quality · Steps 5 & 6
Employer group life insurance disappears when you change jobs or lose employment — exactly when other financial stresses are highest. Individual term policies remain in force regardless of employment. Employer coverage supplements individual coverage; it is not a substitute.
Individual policies are portableWaiver of premium (policy continues if you become disabled), accelerated death benefit (access portion of death benefit for terminal illness), and child rider (inexpensive coverage for children) are worth evaluating. Avoid riders that primarily generate commission — they add cost without proportional benefit.
Evaluate riders criticallyAfter the Work
After evaluating your need and coverage:
Your dependents are protected for the right amount and period. Review when life circumstances change.
The gap between current coverage and the DIME calculation is your priority. Term life for the difference is typically straightforward to obtain.
Life insurance may not be necessary in your current situation. Reassess when dependents arrive or significant joint obligations are created.
The right life insurance is the amount that makes your absence financially survivable for the people who depend on you.
Next Step
Use Worthune's life insurance need calculator to apply the DIME method to your specific dependents, debts, and income — and find your coverage target.
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