Quick estimate of how much life insurance cover you need, using the income-multiple rule of thumb.
A common rule of thumb: cover = annual income × a multiplier that's higher for younger people (more earning years to replace) and lower as you approach retirement.
Illustrative estimate only — actual premiums and payouts depend on the insurer's underwriting, medical checks, and policy terms. Always get a quote directly from a licensed insurer.
The quick rule of thumb — buy cover worth 10-15 times your annual income — is easy to remember, which is exactly why it's so widely repeated, and exactly why it's also incomplete. It's a reasonable floor for someone with no major debts and no dependents yet, but it doesn't look at your family's specific situation: it ignores an outstanding home loan that would otherwise fall to your family to repay, doesn't account for children's education costs still years away, and takes no notice of existing savings or insurance that could offset how much new cover is actually needed.
A fuller approach adds up the actual obligations: outstanding debts (home loan, car loan, any other liabilities) that shouldn't become your family's burden, a replacement income figure for your dependents' living expenses until they're self-sufficient (often estimated via the Human Life Value method), specific future costs like children's education or marriage, and then subtracts what's already covered — existing life insurance, liquid savings, and investments that could be used immediately. What's left after that subtraction is the actual cover gap, and it's common for this "needs-based" number to come out meaningfully higher than the flat income-multiple rule, especially for someone with a large home loan and young children — precisely the households where underinsurance has the worst consequences.
It's a reasonable starting floor, especially for someone early in their career with no major debts or dependents yet, but it doesn't account for your specific situation — outstanding loans, children's education costs, or existing savings and cover. A needs-based calculation that adds up actual obligations usually gives a more accurate number.
Outstanding debts (home loan, car loan, other liabilities) your family shouldn't have to repay from other assets, a replacement-income figure for dependents' living expenses until they're self-sufficient, specific future costs like children's education, and then subtract what's already covered — existing insurance, savings and investments that could be used immediately.
The flat multiple rule doesn't know about your specific debts or family situation. A large outstanding home loan plus young children whose education is still years away can push the real cover requirement well above a generic 10-15x-income figure, since those are concrete future obligations the flat rule never accounted for.
Yes — the goal is closing the actual gap, not double-counting protection you already have. Existing term or endowment cover, liquid savings, and investments that could realistically be used by your family should all be subtracted from your total calculated need to arrive at how much new cover to actually buy.