How much life insurance do you really need?

A simple way to work out the right life cover for your family, and why a term plan is usually the best start.

Many families are under-insured because the cover was chosen by premium, not by need. Here is a simple way to get the number right.

1. Start with income replacement

Your family needs money to replace your income for the years they depend on it. A common starting point is 10 to 15 times your annual income.

2. Add your loans and goals

Add outstanding loans such as a home loan, and big goals you want protected, for example your children's education.

3. Subtract what you already have

Reduce the figure by existing investments and any cover you already hold. What remains is the cover to buy.

4. Choose the right type of policy

A pure term plan gives the highest cover for the lowest premium. Keeping insurance and investment separate is usually more efficient than endowment or money-back plans.

Insurance is the subject matter of solicitation. Talk to us to calculate the right cover for your family.