How much life insurance do you actually need?
Ten times salary is a guess. Here is the four-step calculation that gives you a real number, with a worked example you can put your own figures into.
Add the debts that would need clearing, the income shortfall multiplied by the years it needs replacing, and one-off costs such as a funeral and probate. Then subtract death in service and any existing policies. The shape matters too: decreasing cover suits a repayment mortgage, level cover suits income replacement.
Work it out, do not guess it
Most people pick a round number. Ten times salary is the usual guess, and it is right by accident about as often as it is wrong.
The proper method has four parts. Debts, income replacement, one-off costs, and what already exists.
Add up what would have to be repaid
Mortgage balance, loans, credit cards, car finance. Anything that would still be owed the day after.
Work out the income to replace
Not your full salary. The shortfall between what the household would still receive and what it needs, times the number of years it needs replacing.
Add the one-off costs
A funeral, probate, time off work for the surviving partner, and any change in childcare that follows.
Take off what already exists
Death in service from an employer, existing policies, savings, and any pension death benefit.
A worked example
The arithmetic is easier with real numbers, so here is a typical household.
| Amount | Note | |
|---|---|---|
| Mortgage balance | £198,000 | Must be cleared |
| Car finance and a loan | £14,000 | Must be cleared |
| Income shortfall | £1,400 a month | After the survivor's own income |
| Years it is needed | 14 | Until the youngest child is 18 |
| Income replacement needed | £235,200 | £1,400 x 12 x 14 |
| One-off costs | £12,000 | Funeral, probate, time off |
| Less death in service | £90,000 | Three times salary |
| Cover needed | £369,200 | The sum of the above |
An illustration to show the method. Your figures will differ, and the shape of the cover matters as much as the amount.
Notice that ten times salary for someone earning £30,000 would have been £300,000. Close, and £69,000 short.
The shape matters as much as the amount
Level term
Stays the sameThe sum stays flat for the whole term. Right for income replacement and interest-only mortgages.
Decreasing term
Falls over timeThe sum reduces roughly in line with a repayment mortgage. Cheaper, and only suitable for debt that is actually reducing.
Family income benefit
Pays monthlyInstead of a lump sum it pays a monthly income for the rest of the term. Often cheaper and easier for a family to manage.
Whole of life
No end datePays whenever you die rather than within a term. Used for inheritance tax planning rather than family protection.
Family income benefit is the one people have never heard of and often the one that fits best. A monthly payment is easier to manage than a large lump sum during the worst year of someone's life.
How long the cover should run
Want the sum worked out on your own numbers?
Send us the mortgage balance, the income and the ages. We will do the calculation and tell you what it would cost.
Ask us a questionPrefer WhatsApp? Message us there. We are open Monday to Saturday, 9am to 8pm.
We advise on and arrange life cover, critical illness cover and income protection ourselves. There is no fee to you for our advice. If you take out a policy, the insurer may pay us a commission.
What the state actually provides
People assume there is more of a safety net than there is.
Bereavement Support Payment is worth up to £3,500 plus 18 payments of £350 at the higher rate. That is under £10,000 in total, and you must claim within 3 months to get all of it.
Against a mortgage and fourteen years of lost income, that is not a plan.
Write it in trust
A policy written in trust pays to the people you named, without waiting for probate, and usually outside your estate for inheritance tax.
Inheritance tax is charged at 40% above the £325,000 nil rate band. A large policy paid into an estate can create a bill that the policy was meant to prevent.
It costs nothing to set up at the point of application, and it is the step most commonly skipped in the whole process. Our trust page explains how it works.
How we handle this
Life cover is one of the things we are authorised to advise on and arrange ourselves. There is no fee to you for our advice. If you take out a policy, the insurer may pay us a commission.
What that buys you is the sum working out, the shape being right, the trust being set up, and honest disclosure on the application so the claim actually pays.
If you also need a mortgage, we introduce you to a separately authorised firm and tell you who they are first.
Who this suits, and who it does not
- Someone relies on your income
- You have a mortgage or other debt in joint names
- You have children who are not yet independent
- You are the higher earner in a household with fixed costs
- Nobody depends on your income
- Your assets already exceed your debts comfortably
- You are single with no dependants and no joint borrowing
- You have generous death in service and no mortgage
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.
Check broadband at an address (Ofcom)
Want all your bills in one?
We can introduce you to a specialist who can combine your mobile, broadband and utilities into one bill. There's no fee for the introduction.
We don't provide these services ourselves. Switching household bills is not a regulated financial service, so FCA protections and the Financial Ombudsman do not apply. We'll only pass your details to the specialist if you ask us to. See our privacy notice.
Questions people actually ask
How much life insurance do I need?
Is ten times salary a good rule?
Should I get level or decreasing cover?
What is family income benefit?
Does the state pay anything if my partner dies?
Do I need cover if I do not work?
Will my policy pay out if I have a health condition?
How much does life insurance cost?
How do I check broadband speed at a property?
Where to go next
- GOV.UK, Bereavement Support Payment
- GOV.UK, How Inheritance Tax works
- GOV.UK, Statutory Sick Pay
- MoneyHelper, Death and bereavement
- FSCS, What we cover
Figures checked on 1 September 2026 and correct for the 2026/27 tax year. Rates change, so check the source before you act on a number.
Get the number right, then get the shape right
Life cover is one of the things we advise on and arrange ourselves.
Start a conversationPrefer WhatsApp? Message us there. We are open Monday to Saturday, 9am to 8pm.
We advise on and arrange life cover, critical illness cover and income protection ourselves. There is no fee to you for our advice. If you take out a policy, the insurer may pay us a commission.