1) Mortgage balance
If the goal is to clear a mortgage, start with the outstanding balance (or your share of it).
Mortgage protection →Life Insurance Guide
How much life insurance cover do you need?
There’s no perfect number. A practical approach is to estimate what you’d want the payout to achieve (mortgage, bills, income support) and choose a level you can afford long-term.
- âś” Simple calculation method
- âś” Mortgage + income support options
- âś” A practical checklist
A simple method (most people can use)
Start with your biggest financial risks, then decide what you want covered if you die. Many people prioritise clearing a mortgage and giving the household a buffer.
- Decide your goal: mortgage cover, family support, or both
- Estimate cover amount using the checklist below
- Choose a term length that matches your “risk period”
- Compare like-for-like before buying
Step-by-step estimate
Use the sections that apply to your situation.
2) Other debts
Consider loans, credit cards, car finance, or other commitments you’d want paid off.
3) Income support
Decide how many years of income you want to “replace” to help cover household costs. Some people aim for a short buffer; others aim for several years.
4) One-off costs
Funeral costs, immediate bills, childcare, or education costs (if relevant).
Choosing the term length
The term is how long the policy runs for.
Mortgage term
Often match the policy term to your mortgage end date.
Mortgage protection →Children / dependants
Many parents choose a term that lasts until children are adults (or through education).
Affordability
A smaller cover amount you can keep long-term may be more useful than a large amount you cancel.
Premium explained →Review moments
Marriage, children, moving home, and new debt are good times to review cover.
Match cover type to the goal
Structure matters as much as the amount.
Decreasing term
Often chosen for repayment mortgages, where the balance reduces.
Level vs decreasing →Level term
Often used for family support or interest-only mortgages, where the target amount may not reduce.
Level vs decreasing →Joint vs single
Joint policies usually pay out once. Single policies can give ongoing cover to the survivor.
Joint vs single →Critical illness option
If you’re worried about serious illness affecting finances, compare critical illness carefully.
Life vs critical illness →Quick checklist (copy/paste)
A simple list you can use before getting quotes.
Write down:
Mortgage balance + debts + income support + one-off costs. Then sanity-check against what you can afford monthly.
- Mortgage balance (or share)
- Other debts to clear
- Years of income support desired
- Childcare/education considerations
- Immediate costs (funeral, bills)
- Policy term end date goal
- Preferred structure: level or decreasing
- Joint or single
Next reading
Life insurance basics
Read guide →Mortgage protection
Read guide →Level vs decreasing term
Read guide →Premium (glossary)
View definition →Affiliate disclosure
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