Life insurance guide
How much life insurance do I need?
Clear the debts, replace the income, cover the children, subtract what you already have. Use the calculator below to get a figure in under a minute, then send it straight to an adviser.
Life cover calculator
Based on the standard debts-income-children-funeral method UK advisers use. Adjust the figures to match your situation.
Balance left to clear
Loans, credit cards, car finance
Gross, before tax
Until children are independent
Childcare, university support
UK average is around £4,300
Deducted from the total
Including death in service
- Debts to clear
- £185,000
- Income replacement (10 yrs)
- £350,000
- Children & final costs
- £24,500
- Less savings & existing cover
- −£10,000
- Suggested cover
- £550,000
An estimate, not advice. Your adviser will sanity-check the figure with you.
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A few basics
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The four things cover has to do
Every credible calculation in the UK market comes down to the same four jobs. Get these right and the number takes care of itself.
Clear the debts
Mortgage balance first, then loans, credit cards and car finance. Nobody should inherit a repayment they cannot make.
Replace the income
Multiply your gross income by the number of years your household would need it — usually until the youngest child is independent.
Fund the children
Childcare, school costs and university support. This is the figure most people underestimate.
Deduct what exists
Savings, investments and death in service reduce the gap. Only insure the shortfall — you are not buying a lottery ticket.
Worked examples
Three typical UK households, using the same method as the calculator above.
| Situation | Debts | Income need | Suggested cover |
|---|---|---|---|
| Couple, two young children, £180k mortgage, £35k income | £185,000 | £350,000 (10 yrs) | £550,000 |
| Single parent, £140k mortgage, £28k income, one child aged 12 | £142,000 | £168,000 (6 yrs) | £320,000 |
| Couple, no children, £220k interest-only mortgage, £60k joint income | £220,000 | £60,000 (1 yr buffer) | £285,000 |
Illustrative figures for guidance only. Your adviser will refine them against your actual mortgage terms, employer benefits and family plans.
Common mistakes
- Insuring only the mortgage and forgetting that the household still needs an income
- Counting death in service as permanent cover when it ends the day you change jobs
- Choosing a term that ends before the mortgage does or before children finish education
- Ignoring inflation — index-linked cover keeps a 25-year policy meaningful
- Buying single cover for a couple instead of two single policies, which usually pay out twice
- Setting the sum assured once and never reviewing it after a move, a baby or a pay rise
Frequently asked questions
How much life insurance do I need in the UK?
A common starting point is your outstanding mortgage plus other debts, plus around ten times your annual income if you have dependants, plus childcare or education costs and final expenses, minus savings and any cover you already have such as death in service. For a household with a £180,000 mortgage and a £35,000 income, that typically lands between £400,000 and £600,000.
Is ten times salary a good rule for life insurance?
Ten times gross salary is a reasonable rule of thumb for someone with young children and a mortgage, because it replaces income for long enough to get dependants to independence. It is only a shortcut, though — it ignores your mortgage balance, existing employer cover and savings, all of which can move the right figure substantially in either direction.
Should life insurance cover the full mortgage?
If a surviving partner could not pay the mortgage alone, yes. With a repayment mortgage the balance falls over time, so decreasing term cover can match it cheaply. With an interest-only mortgage the balance stays flat, so you need level term cover for the whole amount.
Does death in service count towards my cover?
It counts, but treat it cautiously. Death in service is usually two to four times salary and disappears the day you leave the employer. Advisers typically deduct it from the calculation while recommending you keep a personal policy that is not tied to your job.
Do I need life insurance if I have no children?
It depends on who would be financially worse off. If you have a joint mortgage, a partner who relies on your income, or business debts personally guaranteed, cover still matters. A single person with no dependants and no joint debt often only needs enough for funeral and estate costs.
How much does £500,000 of life insurance cost in the UK?
A healthy 35-year-old non-smoker can often get £500,000 of level term cover over 25 years for roughly £20 to £30 a month. Price rises sharply with age, smoking status, BMI and medical history, which is why comparing several insurers matters more than the headline figure.
Can I increase my cover later?
Many policies include guaranteed insurability options that let you increase cover after events such as a new mortgage, marriage or a child, without new medical underwriting. If you expect your commitments to grow, ask your adviser to prioritise policies that include those options.
Turn your figure into real quotes
An FCA-regulated adviser will check the number against your mortgage, employer cover and family plans, then search the whole UK market for the best price.
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