Two ways to size life cover
Term insurance pays your family a sum if you die during the policy term. It should be large enough to replace what your income would have provided, clear your loans and fund the big goals you planned for them.
- Income method (human life value): today's value of the income your family would lose until you'd have retired, after the part you spend on yourself. It suits people whose income is growing and who support others.
- Expense method: today's value of your family's own yearly expenses for the same years. It's often lower, and closer to what the family actually needs.
Both add loans to clear and future goals, and subtract savings the family could use. The calculator shows both and takes the higher, rounded up. A quick check: cover is often 10 to 15 times yearly income.
Things to keep in mind
- Employer group cover usually ends when you leave the job, so don't rely on it alone.
- Choose a term that runs at least until you'd retire, or until your children are independent and loans are paid.
- Review the cover after marriage, a child, a new home loan or a big rise in income.
- Life cover protects the family's future income; an emergency fund and health insurance cover the short term.
For education only. Welthr doesn't recommend insurers or policies. Compare policies, read the terms and declare your health honestly when you buy.
Results are estimates for illustration only, not financial advice. Banks and schemes may round, apply TDS or use slightly different day counts — confirm figures with your bank or employer. Written by the Welthr team; last reviewed on .