Life Insurance Needs Calculator
Calculate how much life insurance cover you need based on income, mortgage, debts and family costs.
Last updated: April 2026 · Source: MoneyHelper — Life insurance guide
Recommended Life Cover
£770,000.00
Total Needs
£780,000.00
Already Covered
£10,000.00
| Income replacement (15 years) | £525,000.00 |
| Mortgage | £200,000.00 |
| Children's costs | £50,000.00 |
| Funeral costs | £5,000.00 |
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
Life insurance provides a tax-free lump sum to your dependants if you die during the policy term. The amount of cover you need typically includes your outstanding mortgage, other debts, income replacement for a set number of years and any specific costs such as children's education. A common rule of thumb is 10 times your annual salary, but individual circumstances vary.
UK life insurance comes in two main forms: level term (fixed payout throughout the term) and decreasing term (payout reduces over time, matching a repayment mortgage). Level term is more expensive but provides consistent cover. Whole-of-life policies pay out whenever you die but cost significantly more and are mainly used for inheritance tax planning.
Premiums depend on your age, health, smoker status, occupation and the amount and length of cover. Writing a policy in trust ensures the payout is not included in your estate for inheritance tax purposes and can speed up payment to beneficiaries.
Example: Age 35, non-smoker, £250,000 mortgage, 2 children
- Mortgage cover needed: £250,000 (decreasing term, 25 years)
- Income replacement (10x salary): £400,000 (level term, 20 years)
- Total cover: £650,000 across two policies
- Estimated monthly premium: £35-£55
- Annual cost: £420-£660
Frequently Asked Questions
- What does the Life Insurance Needs Calculator do?
- Calculate how much life insurance cover you need based on income, mortgage, debts and family costs. All calculations are performed in your browser using official UK rates and thresholds.
- Are these actual quotes?
- No. This calculator provides estimates based on typical UK insurance factors. Actual premiums depend on your specific circumstances. Always compare quotes from multiple insurers.
- Is insurance required by law?
- Some insurance is legally required in the UK — such as motor insurance, employers' liability insurance and buildings insurance (if you have a mortgage). Other types are optional but strongly recommended.