How much insurance do you actually need? Less guesswork than you think

Ask three people how much life cover they need and you will get three shrugs and a number someone once quoted them. It feels like a mystery, so people either over-buy out of anxiety or under-buy out of inertia. It is more checkable than that.

Start from what the money would actually have to do if something happened to you. Three buckets. Replace the income your dependents rely on, for the years they would rely on it. Clear the debts that would otherwise land on your family, the mortgage being the big one. And cover the immediate costs, medical and final expenses, so nobody is scrambling.

A rough way to size the income piece is to take the annual support your family would need and multiply by the number of years they would need it, then add the debts, then subtract what you already have, savings, investments and any cover already in place. What is left is the gap insurance is meant to fill. It is not precise, but it turns a vague worry into a number you can actually look at.

Critical illness is a different job. It is not about replacing you, it is about buying time and choices if you are seriously ill but still here, so a common frame is a few years of income to take the financial pressure off while you recover. Hospitalisation is different again, and for most people an Integrated Shield Plan is the workhorse there.

The mistake is treating the number as fixed. A new home, a child, a jump in income, each one changes the gap. Cover bought for the life you had five years ago quietly stops matching the life you have now, which is why this is a thing to review, not set and forget.

Protection is the unglamorous half of a financial plan, but it is the half that lets the investing half work without fear. For the wider context, my starter guide lays out the basics in plain English. And if you want your own number worked out properly, book a free 30-minute review. General information only, not financial advice.