How Much Life Insurance Should I Get?
There is no universal amount of life cover. The useful starting point is what your family or other dependants would need financially if you died, for how long, and what resources would already be available. This guide helps you prepare for an adviser discussion; it does not calculate a recommended sum or replace a personalised assessment.
What would the payout need to support?
Start with the commitments that matter in your circumstances. The intended use of the payout can affect whether a fixed lump sum, reducing cover or regular payments is more suitable.
- Mortgage, rent and debts: consider outstanding balances and whether someone else would be responsible for the payments. Decreasing cover may be considered for a repayment mortgage; level cover may be more appropriate for a fixed lump-sum need. Read about Mortgage Protection Insurance.
- Ongoing household costs: think about essential spending, childcare and the income a partner or dependants would lose, and how long support might be needed.
- Future plans: education or other family commitments may change over time, so review your assumptions rather than relying on a single fixed rule.
- Funeral or estate needs: if these are a priority, consider what funds would be available and whether a particular policy type is appropriate. Costs, exclusions and long-term premiums require care.
Account for cover and resources you already have
Check existing personal policies, any death-in-service benefit through work, savings and other resources your family could use. Workplace cover may end when employment ends. Avoid cancelling an existing policy before understanding the effect of replacing it, including changes to price or eligibility.
How long might protection be needed?
A mortgage term, the years until children become financially independent, or a period of income replacement may suggest different cover terms. With family income benefit, a valid claim can provide regular payments for the remaining term rather than one lump sum. Compare arrangements on the Life Insurance page.
What affects the premium?
Insurers assess factors including the amount and duration of cover, age, health, smoking, lifestyle and occupation. The policy type and optional features can also affect cost. Be accurate in your application and check the policy wording; an adviser can help you compare options within a sustainable budget. There is no reliable “average cost” that determines the right cover for an individual.
Questions to take into an adviser conversation
- Who would rely on the payout, and what are their current and likely future commitments?
- Would they need a lump sum, regular income, or both?
- What cover or savings are already in place, and when might that change?
- What monthly premium could you maintain over the proposed term?
- What exclusions, review terms or conditions apply to each option?
The answers can help frame a suitable discussion, but the amount and availability of cover will depend on your circumstances, insurer underwriting and policy terms.
Talk through your cover needs
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