How much life insurance might I need?
Consider how you would support your family or pay the bills if something happened to you, and whether life insurance could help you.
The answer to this question will vary depending on your personal and financial circumstances. The key consideration regarding life insurance is how your regular outgoings will be maintained if you die. And if there are any other main income earners in your family, the same life insurance consideration could apply to them too.
Add up your monthly outgoings
How much does it cost to run your household every month? Add up your household costs – such as mortgage, council tax, heating, power and water bills, travel costs, and telephone and internet charges.
Add other expenses
If you have any other regular expenses, such as loan repayments and credit card bills, add these to your total outgoings.
Consider any existing life insurance cover
Do you have any existing insurance, income or benefits that will pay out if you die? For example, you may have death in service insurance.
How long should my life insurance cover last?
Once you know what the income and expenditure figure may be and how much will be needed immediately, you also need to consider how many years of financial help may be needed. Do you have anybody dependant on your income?
And when you do your calculations, remember that any income could be devalued over time, so allow for inflation!
As with all insurance, life insurance is based on risk – and the hope that ‘it won't happen to me'. But if it does…?
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