Insurance Calculators
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Cover is a number you calculate, not a multiple you guess.
Life cover is commonly sold as a multiple of salary, which ignores everything specific about your household. A more useful approach works from what your dependants would actually need: income replaced for a defined period, debts cleared, and future costs such as education funded.
Work from obligations, not from salary multiples
Start with the debts that would need clearing — mortgage first — then the annual income your household would need replaced and for how many years, then any lump-sum future costs. Subtract existing cover and liquid savings. The result is a figure grounded in your circumstances rather than a rule of thumb, and it usually differs substantially from the standard ten-times-salary suggestion in one direction or the other.
Frequently Asked Questions
How much life insurance do I need?+
Enough to clear outstanding debts and replace the income your dependants rely on for as long as they rely on it, less what you already hold. For households with a mortgage and young children, this is frequently more than the commonly quoted ten times salary; for those without dependants it is often far less.
Is term or whole life better?+
Term covers a defined period at much lower cost and suits most people, whose need for cover ends once dependants are grown and the mortgage is repaid. Whole life combines cover with an investment component and is considerably more expensive per dollar of cover.