How much life cover do you need?
Most people arrive at a number by guessing, or by taking whatever multiple of income they were told. This works it out from what your family would actually have to deal with.
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The method is written out in full below, and it is deliberately simple enough to do on paper: add the income you would want replaced, add what you owe, add anything you want funded, then subtract what you already have.
The gap your own figures suggest
—
| Income replacement | — |
|---|---|
| Debts to clear | — |
| Goals to fund | — |
| Less savings and investments | — |
| Less cover already held | — |
| Gap | — |
A sanity check
This is an estimate based on the figures you entered. It is not a quotation, and it does not reflect any insurer's product terms or pricing. What a policy actually costs is set by the insurer at underwriting.
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How this is worked out
Four things added, two things subtracted. That is the whole method, and it is worth understanding rather than trusting.
- Income replacement. Your annual income multiplied by the number of years you would want it replaced for. This calculator does not discount that figure for investment returns — doing so produces a smaller, more optimistic number that depends entirely on an assumed rate of return. The undiscounted version is more conservative and easier to check.
- Debts. What you would want cleared rather than inherited.
- Goals. Anything you would want funded regardless.
- Less what exists. Savings and investments your family could reach, and life cover you already hold.
The result is a gap, not a recommendation. It is what your own numbers imply, and it is only as good as the numbers you put in.
The sanity check compares your answer against the ten-to-fifteen-times-income benchmark. That benchmark is a common rule of thumb, not a rule — it is useful for noticing that a figure is surprising, and useless for deciding anything on its own.
Questions people ask
Is ten to fifteen times income a real rule?
It is a common benchmark, and a reasonable sanity check on whatever number you arrive at. It is not a calculation — it takes no account of what you owe, how many people depend on you, or what you already hold. Treat it as a way to notice that your answer is oddly high or oddly low.
Should I include my home loan?
If you would want it cleared rather than left to your family to service, yes. That is the test for every debt here: would the people you are insuring for want it gone, or would they keep paying it? Include what they would want gone.
Does my employer's cover count?
It counts while you hold that job, and stops when you leave. That makes it worth subtracting, but worth subtracting with your eyes open — cover you would lose on changing employer is not the same as cover you own.
Why subtract savings and investments?
Because insurance is there to fill a gap. Money your family could actually reach reduces the size of that gap. Be honest about what is genuinely available though — money already earmarked for something else is not really available.
Is this figure what I will be offered?
No. It is what your own numbers suggest you might need. What an insurer will actually issue depends on your income, your age and its underwriting — cover is capped as a multiple of income, and that cap may sit below or above this figure.
Related reading
- Human life value — the other common way to size cover, and how it differs from this one.
- What happens after you apply — including why the cover you ask for is capped against your income.
- Term insurance — the category that buys the largest cover for the smallest outlay.
Last reviewed: 31 August 2026