Stop guessing how much life insurance you need. Enter your income, mortgage, dependants and existing cover to get a precise, personalised cover target — and see how much term life insurance would cost to get there.
Life insurance is purchased with a single purpose: to replace your financial contribution to your family if you die. The calculation is straightforward: income replacement (years of income your dependants need × annual income) + debts to clear (mortgage, loans) + specific costs (childcare, education) − existing cover (death in service, existing policies, savings). This gives a precise cover target rather than a vague "rule of thumb".
Fixed lump sum paid on death within the policy term. Most common for pure financial protection. Best for: covering a mortgage, providing income replacement, covering specific debts. Cost: cheapest per £ of cover. Example: £500,000 level term for 25 years, age 35, non-smoker: approximately £22–£35/month. Review every 5 years or when circumstances change.
Cover amount reduces over time, typically matching a repayment mortgage balance. Cheaper than level term because the insurer's maximum payout decreases annually. Best for: covering a repayment mortgage specifically. Not suitable for: income replacement or general family protection. Difference in premium: 20–40% cheaper than equivalent level term.
Calculate: (Annual income × 10) + outstanding mortgage + other debts + children's costs until independence − existing death-in-service benefit − liquid savings. A more precise formula: income × years until youngest child reaches independence × 0.7 (70% income replacement). Both methods produce a similar range. Then compare to the cost of term life insurance — which is typically much cheaper than most people expect, especially under 45.
Yes — if you have dependants who would struggle to maintain mortgage payments without your income. Mortgage lenders do not require life insurance (unless you have a combined life and mortgage product), but the financial risk to your family is significant. A £180,000 mortgage with a £30,000 annual income household: losing the income-earner without life insurance could force the sale of the home. Term life insurance covering the mortgage balance costs approximately £10-25/month for a 35-year-old.
Death in service is a life insurance benefit provided by many UK employers as part of the employment package. Typically 2-4× annual salary. Example: £40,000 salary with 3× death in service = £120,000 benefit paid to your nominated beneficiaries on death while employed. This counts toward your life insurance needs — subtract it from your total cover target. However, it disappears if you change jobs or become unemployed, so do not rely on it as your only life cover.