How much life insurance cover do I need?

Everything you need to know when working out how much life insurance to buy

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Your life insurance cover needs to be big enough to settle your debts, and provide financial support for those you would leave behind.

When working out how much cover you need, factor in your existing debts as a start. Then, work out general living costs. Include any childcare or household maintenance your family may need if you were the main breadwinner.

Factor in any life insurance you already have, as this may mean you don’t need as much cover as you think. For example, employers sometimes provide what’s called a death in service benefit – this is usually set at four times the employee’s gross annual salary. So if you decided you needed £400,000 of life cover and you did indeed have a death in service benefit of £120,000, you’d only need a sum insured of £280,000.

This is important because the bigger the sum insured, the bigger the premium – being accurate means that you won’t end up paying too much.

To help you work out your sum insured, we’ve built a calculator that guides you through the arithmetic. Or, if you prefer, you can chat things through with one of our expert advisers.

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