How Much Life Cover Do You Need? A Simple Way to Estimate It

A common starting rule of thumb is 10-15 times your annual income, but a more accurate estimate — often called the "human life value" approach — adds up your outstanding liabilities (like a home loan) and your family's future expenses, then subtracts any existing savings and investments that could already cover part of that need.

Why the income-multiple rule is a starting point, not an answer

10-15x annual income is easy to calculate, but it ignores your actual liabilities and family situation. Someone with a large home loan and young children needs meaningfully more cover than someone with the same income, no debt, and no dependents — the multiple treats both cases identically, which is where it breaks down.

A more complete estimate

Add together:

• Outstanding loans (home, car, personal) that shouldn't fall to your family
• Future major expenses — children's education, weddings, other planned goals
• Years of income replacement your family would need (commonly 10-20 years of expenses, depending on dependents' ages)

Then subtract existing life cover, savings, and investments that could already fund part of that total. What's left is a more realistic cover target than a flat income multiple.

Where even this breaks down

Any estimate is only as good as its inputs — it assumes you know your family's actual future expenses and correctly value your existing assets, which for most people takes an actual conversation rather than a formula alone. Treat any calculator output, including our own, as a starting estimate to refine with an advisor, not a final number.