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Life Insurance Calculator

Work out how much life insurance you need: enough to replace your income for the years your family would need it, pay off the mortgage and other debts, and cover education and funeral costs, less the savings and cover you already have.

£

A year: your take-home pay

years

Until your youngest is grown up

£
£

Car loans, cards, student loans

£

That your family could use

£

Death in service from work, mortgage cover, or your own policy

More options· £5,000 final costs
£

In total, to set aside

£
%

A year, above inflation

Life cover you need

£500,000

Your family would need £495,000; you already have £10,000 in savings and cover.

Income for 10 years
£300,000
Mortgage and debts
£190,000
You already have
£10,000

What this means

Level term life insurance for 10 years is usually the cheapest way to get this cover: it pays out if you die during the term, and costs less the younger and healthier you are when you buy it. Choose a term that lasts until your children are grown up or your mortgage is paid off.

If no one depends on your income, you may need little or no life cover. Cover for your income if you’re too ill to work is often more important, and more likely to be needed.

Next step

How it adds up

Income for 10 years£300,000
Mortgage and other debts£190,000
Funeral and final costs£5,000
Your family would need£495,000
Less savings and investments-£10,000
Less cover you already have£0
Extra cover needed£485,000

What the cover pays for

Your family’s needs
  • Income for 10 years£300,000
  • Mortgage and debts£190,000
  • Final costs£5,000
Assumptions in this estimate
  • Each year’s income is simply set aside, with any interest on it just keeping up with inflation.
  • The amount is rounded up to a round figure, as policies are sold. It’s a starting point: a broker or adviser can look at your whole situation.
  • If your mortgage has a decreasing term policy that clears it, count that in the cover you have.
  • Writing a policy in trust means the payout reaches your family quickly and isn’t counted for Inheritance Tax.
  • A husband, wife or civil partner may get Bereavement Support Payment for 18 months after a death.
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How the calculator works

  1. Income to replace: what your family would need each year, usually your take-home pay, for the number of years you choose, such as until your youngest leaves school.
  2. Debts: your mortgage and other debts, so your family could pay them off.
  3. Other costs: children’s education and funeral costs, under More options.
  4. Less what you have: savings and investments your family could use, and cover you already have: death in service, a mortgage policy or your own.

The result is rounded up to a round amount, as policies are sold.

Example

To replace £30,000 a year for 10 years, clear a £180,000 mortgage and £10,000 of other debts, and cover £5,000 of funeral costs, your family would need £495,000. With £10,000 of savings, that’s £485,000 of cover, so about £500,000: for example, decreasing term for the mortgage and level term for the rest.

Don’t forget

  • Bereavement Support Payment may help a husband, wife or civil partner for 18 months after a death.
  • Income protection: you’re more likely to be unable to work for a while than to die young, and Statutory Sick Pay is low. Check what your employer pays when you’re off sick.
  • A stay-at-home parent needs cover too: replacing childcare and running the home costs money.

Learn more

See our insurance basics guide, the budget calculator to fit the premium in, and the net worth calculator to add up what you’d leave.

Last updated

Frequently asked questions

How much life insurance do I need?

Enough to replace your income for as long as your family would rely on it, clear your mortgage and debts, and pay for anything else you want covered, less your savings and any cover you already have, such as death in service from work.

Level term or decreasing term?

Decreasing term pays out less as time goes on, matching a repayment mortgage as you pay it down, so it’s cheaper. Level term pays the same amount throughout, which suits replacing income for your family. Many people have both.

Does death in service count?

Yes, while you’re in the job. It’s often two to four times your salary, but it ends when you leave, so it’s worth having some cover of your own too.

Should I write my life insurance in trust?

Usually, yes. A policy in trust pays out to the people you choose without waiting for probate, and the payout isn’t counted as part of your estate for Inheritance Tax. Most insurers offer a free trust form.

Do I need life insurance if I’m single or have no children?

Often not, unless someone depends on your income, such as a partner who couldn’t pay the mortgage alone. If not, enough to clear your debts and pay for a funeral may be all you need.