Life-cover needs depend on the income or household costs that would need replacement, outstanding liabilities, dependants, future obligations, existing financial assets and the support period.
Factors to review
- Essential household costs or income replacement
- Duration of dependency
- Outstanding loans and guarantees
- Education or other essential obligations
- Existing usable assets and life cover
How to interpret the information
A needs analysis combines explicit household assumptions. It does not begin with a fixed salary multiple, and its result is an educational planning estimate rather than a policy quotation.
Illustrative scenario
Illustrative needs-analysis scenario: enter household support costs, years of support, liabilities, obligations and usable assets. Changing any one assumption changes the protection gap; the result does not generalise to another household.
Common interpretation errors
- Using a round advertised amount
- Counting assets the household cannot use
- Ignoring existing cover or liabilities
- Treating the estimate as an insurer recommendation
Next step
Use the Term Insurance Calculator to document assumptions, then compare policy wording separately.
Official references
This material is educational and does not prescribe a cover amount, insurer, policy type or rider. Policy terms, regulation and tax treatment can change; verify current official documents before acting.