How much life insurance do I need?
26 August 2026
Most people either guess the number or insure the wrong thing. There is a straightforward way to work it out in ten minutes.
Who this is for: anyone buying life insurance, or checking an existing policy, who wants a figure based on their own life rather than a guess.
How it helps: shows the three steps to work out your number by hand, or lets our calculator do the sums for you in a few minutes.
Two common mistakes when choosing how much cover
The first is insuring the value of the house. The house is not the problem. The mortgage is.
The second is picking a round number because it sounds sensible. Ten times salary is a rule of thumb, not a calculation. Here is why it often misses.
Both produce a figure that is either too high, which you pay for every month for decades, or too low, which nobody finds out until it is too late.
Step 1: what needs to be repaid
Write down the outstanding mortgage balance. Not the original loan, the balance today.
Add any other debt that would not die with you. Loans and credit cards in joint names are the usual ones.
That total is your first number. It is the amount that stops the family having to sell the house.
Step 2: what your family would need to live on
Now think about income rather than debt.
Take the annual amount your household would need if you were not there. Not your salary, the amount actually needed to run the house.
Multiply that by the number of years it would be needed. Until the youngest child finishes education is the usual marker.
A family needing £24,000 a year for twelve years is looking at roughly £288,000, before allowing for inflation.
Add the one off costs people forget. A funeral, and often a period where the surviving partner cannot work.
Step 3: take off the cover you already have
Check your death in service benefit. Many employers provide a multiple of salary, and most people have no idea what theirs is.
Check any existing policies, including old ones attached to a previous mortgage.
Check whether your pension pays a lump sum on death.
Subtract that total from the figure you built above. What is left is roughly what you need to buy.
One warning on death in service. It stops the day you leave the job, so do not treat it as permanent cover.
Rather not do the sums yourself?
Our calculator asks about your family, income, home and existing cover, then works out a suggested amount of cover and a guide price.
Work out how much cover I needA guide to help you think it through, not advice. Prices shown are indications only.
How long your life insurance should last
The amount gets all the attention. The term is just as easy to get wrong.
Match the term to the thing you are protecting. Mortgage cover should run at least as long as the mortgage.
Family income cover should run until the youngest child is independent.
If you extend your mortgage term later, the policy does not extend itself. That gap at the end is a common and avoidable one.
And consider putting the policy in trust. It can stop the payout waiting on probate while the lender still wants paying.
Check broadband before you make an offer
Broadband speeds can vary street by street, so check the exact address before you commit. Ofcom's free checker shows which broadband speeds and mobile coverage are available at any UK property.
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Frequently asked questions
Is ten times salary a good rule?
It is a starting point, not an answer. It ignores your mortgage balance, your existing cover and how long your family would actually need the money.
Should I insure the value of my house?
No. Insure the mortgage. The house keeps its value either way. It is the outstanding debt that has to be cleared.
Does my work death in service count?
Yes, include it, but remember it ends when the job does. Do not build your whole plan on cover you lose when you change employer.
What about my partner if they do not work?
They still need cover. Replacing childcare and running a household has a real cost, and that cost lands immediately.
Should the policy be in trust?
It can let the money reach your family without waiting for probate. Many insurers offer a trust at no extra charge, but check with yours.
What if I cannot afford the full amount?
Cover the mortgage first. It is the cheapest protection per pound and it keeps a roof over everyone. Build the rest up later.
Related reading
- Life insurance calculator: work out the cover you need
- Is ten times salary enough life insurance?
- How much life insurance do I need with children?
- How much critical illness cover do I need?
- Mortgage protection insurance explained
- Decreasing vs level term: which fits your mortgage
- How to protect your mortgage if you lose your job
- Family protection, plain English guide
Want this checked against your own mortgage?
There is no charge to you for a conversation. If you take out a policy, the insurer may pay us a commission. Use the contact page.