Total cover by the DIME method, net of assets.
Coverage needed
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Income replacement
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Total need before assets
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What the four letters of DIME stand for
Most people buy a round number of life cover, two crore or five crore, with no working behind it. The DIME method replaces that guess with four honest questions. D is for the debts your family would inherit, the home loan, the car finance, any personal borrowing. I is for income, the years of earnings your dependants would lose. M is for the mortgage, here folded into debts. E is for the education and future goals you would no longer be around to fund. Add the four, subtract what your family could already lay hands on, and you have a coverage figure grounded in your actual life rather than a sales target.
This is a planning framework, not a tax or regulatory rule, so there are no FBR rates in play here. Life insurers in Pakistan are regulated by the Securities and Exchange Commission of Pakistan (SECP), and it is worth buying only from an SECP-licensed insurer and reading the policy document closely. The numbers this calculator produces are a needs estimate to take into that conversation, not a quote.
Building one family's figure
Consider a breadwinner earning PKR 3 million a year, carrying PKR 2.5 million of debts, expecting PKR 500,000 of final expenses, wanting PKR 4 million set aside for children's education, and holding PKR 1.5 million in liquid assets. The tool replaces income for ten years by default, so income replacement is PKR 3 million times ten, or PKR 30 million. Stack the four needs together and the gross requirement is PKR 37 million. Subtract the PKR 1.5 million already available and the coverage gap is PKR 35.5 million. That is the policy size this household should be discussing.
| Component | Working | Amount |
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The stacked bar shows how the gross PKR 37 million is dominated by income replacement, with debts, goals, and final expenses as thinner layers on top. The notch on the right marks the PKR 1.5 million of assets that comes off, leaving the PKR 35.5 million gap.
Why the ten-year horizon is only a starting point
The biggest lever in the result is the income replacement, and the tool fixes it at ten years of earnings. That default suits a family that needs breathing room but not a lifetime of replaced salary. It does not fit everyone. A parent of a toddler may want fifteen or twenty years of replacement to carry the family until the children are independent, while someone close to retirement with grown children may need far less. Treat the ten-year figure as a sensible middle and adjust your inputs to reflect how many earning years your dependants would genuinely lose.
This calculator is aimed at anyone with people who rely on their income: young parents, sole earners, or those who have just taken on a large home loan. A common mistake it guards against is forgetting to net off assets, which inflates the cover you think you need and the premium you pay. The opposite mistake is counting illiquid assets, like the house you live in, as available cash. Only count what your family could realistically convert to money without selling the roof over their heads.
Should I count my existing employer or group life cover?
Yes, if it is genuinely portable and dependable, treat it like a liquid asset that reduces the gap. But be cautious: group cover from a job usually ends when the job does, and the sum assured is often modest. Many planners ignore it when sizing a personal policy precisely because it can vanish at the worst moment, then treat it as a bonus while it lasts.
Is term insurance or an investment-linked plan the right way to cover this gap?
For pure protection, term insurance buys the largest sum assured for the lowest premium, which is what closing a PKR 35.5 million gap calls for. Investment-linked plans bundle savings with cover and cost far more per rupee of protection. This tool sizes the cover you need; how you buy it is a separate decision, and term is usually the cheaper way to fill a large gap.