There are many ways of determining the amount of cover you need, but as a basic rule: Any insurance is better than none if you need it.
Method 1: The basic one
In most cases 3x-5x your annual salary (before taxes) is enough money to cover all basic expenses for a couple of years and will allow your loved ones time to recover from their loss. For longer term support, 6x-10x your annual salary (before taxes) would be more appropriate.
Method 2: The detailed one
If you want to dive into more detail, then you can break up these typical components, and decide for yourself how much cover you want per component. If you are the sole earner, or you want to be on the really safe side, you should orient yourself on the upper amount while the lower amount may be more appropriate for those who are not the sole earner of the household.
Component | Lower amount | Upper amount |
Mortgage | 75% of mortgage cost | 100% of mortgage cost |
Children | 10k per child per year until child is 18 | 20k per child per year until child is 25 |
Partner | 3x your yearly salary before taxes | 5x your yearly salary before taxes |
Any debt you might have | 100% | 100% |
From the sum here you can subtract any savings you have and any other life insurance sum you have.
Method 3: The custom one
If you're having trouble you can speak to one of our experts to learn how other people decide, as well as receive honest advice regarding your specific situation.
Our goal is never to make the decision for you, but rather to give you the information so you can make a well informed decision.