Is ten times salary enough life insurance?

Rules of thumb exist because the real question feels hard. How much would my family need if I was not here?

Ten times salary gives an instant answer. The trouble is that two people on the same salary can need very different amounts.

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What ten times salary ignores

Your mortgage. Someone with a large mortgage and someone who rents can earn the same and need very different cover.

How long the money is needed. A parent of a newborn needs support to last far longer than a parent of a 17-year-old.

Cover you already have. Death in service from work or an older policy may already cover part of it.

What the other parent earns. A household where the surviving partner earns well has a smaller gap to fill.

Childcare and help at home. If one parent does most of the care, replacing it costs money, whatever they earn.

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When ten times salary leaves you short

An illustration, not a recommendation. A parent earning £30,000 has a £250,000 mortgage and two young children.

Ten times salary is £300,000. Clearing the mortgage would use £250,000 of it, leaving £50,000 for the family to live on.

With children who will need support for many years, that remaining amount may not go far.

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When it gives you more than you need

Another illustration. A parent earning £60,000 has a small mortgage, older children, a partner who earns well, and death in service of several times salary.

Ten times salary is £600,000. Once the existing cover and the shorter time the children need support are taken into account, the real gap could be much smaller.

The difference is paid in premiums every month, often for decades.

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A better way to set the amount

Work from your own life instead: what would need repaying, what your family would need to live on and for how long, minus what you already have.

You can do that by hand using our guide to how much life insurance you need, or let our calculator do the sums for you.

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Frequently asked questions

Is ten times salary a good rule for life insurance?

It is a rough starting point, not an answer. It ignores your mortgage, how long your family would need support, what your partner earns and any cover you already have.

Should I use gross or take-home pay?

Neither tells the whole story. What matters is what your household would need to live on, which is usually different from either figure.

Does death in service count towards ten times salary?

It can reduce what you need to buy, but it usually ends when you leave that job, so it is risky to rely on it alone.

What if I cannot afford ten times my salary?

Start with the most important part, usually clearing the mortgage, and build from there. The right amount for you may be lower than ten times anyway.

Do stay-at-home parents need life insurance?

Often, yes. They may earn nothing, but replacing childcare and running the home has a real cost, and that cost starts immediately.

Related reading

• How much life insurance do I need?
• Life insurance calculator: work out the cover you need
• Do I need life insurance with death in service?
• Decreasing vs level term life insurance