How much life insurance do you need?

Have you any idea how much life insurance you need?

Recent research suggests that many people who have taken out a life insurance policy have not taken enough to even cover the cost of their mortgage, let alone all the other demands which will be made on the payout.


Research carried out for Sun Life found that the average outstanding mortgage is £83,000, but the average life insurance payout is just £51,500 – a shortfall of £31,500.  In other words the average payout would cover just 62% of the average outstanding mortgage.

The research also shows the UK has a massive protection gap with just 29% of people taking out a life policy when they take on a mortgage.


Of course, all of this does not even take into account how your family will survive financially if the worst comes to the worst and you die prematurely.

Ideally, your policy should pay out enough to repay the mortgage plus a suitable sum to pay the on-going bills for your surviving family or provide enough of an income so their lives can continue as normally as possible.

Personal circumstances

There is no ‘one size fits all’ answer to the question of how much cover you need.  It really depends on your personal circumstances and there are a number of factors to be taken into consideration.

The biggest single outgoing most people have is their mortgage so a mortgage life insurance policy will give you the cover that you need for that specific purpose. But what about the rest of the bills? And the living expenses?


You may well have other loans and hire purchase which will also need to be covered.  Then there’s childcare.  How will your surviving partner cope if they have to take on childcare for the kids so they can get out to work and keep their heads above water?

The cost of further education and university fees might come into the equation if your children are older.

Day to day living

Finally, if you are no longer around to provide the cash to finance all the day to day expenses of family living, how are they going to continue their current lifestyle and maintain it in the years to come when their needs will inevitably change?

This is perhaps the most difficult part of the whole calculation, but is no less important because you will want to be able to provide for their future needs as well as resolving the imminent problems they will face.

Good news

The good news is that our friendly knowledgeable staff here at FPL will be able to discuss the best life cover for your needs with you, taking into account all of your personal circumstances and help you plan for the future.

Whether it be just a policy to cover your mortgage, term life assurance from as little as £5 a month, a lifestyle policy to cover you if you’re off work for any length of time through accident, sickness or unemployment, or critical illness cover to protect your family if you are diagnosed with a serious illness, we will be able to suggest the right policy for your needs by consulting our panel of top insurers.

Just give us a call on 0800 103 2613 and we will be happy to help.

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