Love Means Having a Plan B: Life Insurance for the People You Love

By · June 13, 2026

February brings the usual wave of “love is…” content — flowers, dates, grand gestures. But if you ask people who’ve actually had to navigate losing a spouse or parent too soon, a different kind of love story tends to come up: the one where someone, years earlier, sat down and answered an uncomfortable question on purpose, so the people they loved wouldn’t have to scramble later.

That question is simple to ask and surprisingly hard to answer well: how much life insurance do I actually need? Most people either skip the question entirely, or answer it with a guess — a round number that sounds “about right” without being tied to anything real. There’s a better way, and it’s called the DIME method.

Why “a guess” isn’t good enough

Here’s the problem with guessing: insurance coverage that’s too low leaves your family with a gap they have to fill themselves, often at the worst possible time. Coverage that’s too high means you’re paying premiums for protection you don’t actually need — money that could’ve gone toward your own goals.

The DIME method fixes this by breaking “how much coverage” into four concrete categories. Add them up, and you get a number that’s actually based on your life — not a guess borrowed from a friend’s policy or a number that “felt right” to an agent.

D – Debt

Start with everything you owe that wouldn’t simply disappear if you weren’t around to pay it: outstanding loans, credit card balances, car loans, personal loans, and any co-signed debt where someone else would become fully responsible. The goal here isn’t to be morbid — it’s to make sure your debts don’t become someone else’s burden during an already difficult time.

D = ___________ (total of all outstanding debts, excluding your mortgage if you’re handling that separately below)

I – Income replacement

This is usually the largest number in the calculation, and the one people most underestimate. The idea: if your income disappeared tomorrow, how many years would your family need financial support to maintain their standard of living, cover a child’s education, or simply have breathing room while adjusting?

A common starting point is 5-10 years of your current annual income, adjusted based on your specific situation — fewer years if your spouse also earns a substantial income, more years if you’re the sole provider for young children.

I = annual income x number of years of support needed = ___________

M – Mortgage (or remaining home loan)

If your family is making payments on a home, this is the remaining balance on that loan — the amount that would need to be paid off so your family isn’t at risk of losing the home on top of everything else. If you’re renting, or your home is fully paid off, this number can simply be zero.

M = remaining mortgage/home loan balance = ___________

E – Education

If you have children (or plan to), this category covers the estimated cost of their education — from where they are now through college or vocational training, whichever path you’re planning for. Even a rough estimate per child, multiplied by the number of children, gives you a meaningful figure. This is one of the categories families are most grateful was accounted for, because education costs don’t pause for grief.

E = estimated total education costs for all children = ___________

Putting it together — and subtracting what you already have

Add D + I + M + E together. That total is your gross coverage need. From there, subtract any existing assets that could help cover these needs — savings, existing life insurance policies, investments earmarked for this purpose. What’s left is your coverage gap: the amount of additional life insurance that would actually close the gap, not just add coverage on top of what you already have.

Doing this math by hand is doable, but it’s easy to make small errors or forget a step. Our Life Insurance Needs Analyzer walks through the DIME calculation automatically, using your actual numbers, and shows you the gap — if any — between what you have and what your family would actually need.

“But I already have insurance through work”

Group life insurance through an employer is a real benefit — but it’s worth checking two things: how much coverage it actually provides (often it’s a multiple of your salary, sometimes just 1-2x), and what happens to it if you change jobs. For many people, employer coverage is a helpful supplement, but it falls well short of the full DIME number — particularly the income replacement and education portions.

If a VUL is part of your plan

If you’re considering a Variable Universal Life (VUL) policy as part of how you’ll meet your coverage need, it’s worth understanding how the insurance and investment components interact — particularly in the early years of the policy. We go through this in detail in VUL in Plain Words, including why your fund value and your coverage amount aren’t the same thing, even though they’re part of the same policy.

The actual point of all this

None of this is meant to be a downer for Valentine’s season. If anything, it’s the opposite: running this calculation once, and then either confirming you’re covered or addressing a gap, is one of those things that’s quietly, permanently reassuring once it’s done. It’s not something you have to think about again until your situation changes — a new child, a new home loan, a new job.

For more on how the Philippine life insurance market works, including the role of the Insurance Commission in regulating providers, their site has consumer resources worth bookmarking.

And if walking families through exactly this kind of calculation — turning “I should probably get insurance” into a specific, confident number — sounds like work you’d find meaningful, that’s a core part of what financial advisors do in the Philippines every day.

Inspiralife Editorial Team

CPA, RFC, FChFP

Our content is reviewed by CPA, RFC, and FChFP-credentialed financial educators helping Filipinos build financial literacy and advisor careers.

Inspiralife is not affiliated with any insurance or financial company and does not sell any financial product.