How much life cover does a person need?
A widely used rule of thumb puts life cover at 10 to 15 times annual income — enough for the people who depend on that income to replace it for a decade or more.
The more precise answer is a needs calculation: what it takes to settle debts, fund the years of support your dependants would need, and cover final costs — minus what is already in place.
What life cover is actually for
Life cover replaces the two things a household loses when an income earner dies: the income itself, and the plan that depended on it — the bond being paid, the schooling being funded, the debts not landing on the family.
It's not a windfall. It's a bridge: the money that lets life continue while the household rebuilds around the loss.
The rule of thumb — and its limits
The 10-to-15-times-income range is the industry's common shorthand. The logic: invested sensibly, a lump sum of that size can replace most of an income for ten to fifteen years — roughly the time it takes children to grow up or a household to restructure.
Where in the range a household lands follows from its shape: young dependants, a single income and a large bond point to the high end; grown children, two incomes and savings already built point lower. But a rule of thumb can't see your bond balance, your children's ages, or what you've already built — which is why the needs-based count exists.
The needs-based way of counting
Add what would need to be paid for; subtract what already exists:
- Outstanding debts — the bond, vehicle finance, loans — so they die with you, not with your family
- Income replacement — the annual amount your dependants would need, times the years they would need it
- Education commitments — school and university, at their real costs
- Final costs — the estate expenses, executor fees and taxes that arrive before anything is paid out
- MINUS existing cover — personal policies and group life cover through work
- MINUS assets that could reasonably be used — investments and savings (not the family home)
Why the number changes with life
The right figure isn't fixed — it moves with life in both directions. A new child or a bigger bond pushes it up; a paid-off home, grown children or a retirement pot maturing pull it down. That's why cover gets reviewed after life events, not just bought once.
Group cover counts — carefully
Cover through an employer is real cover, and it belongs in the count. It just carries one property worth knowing: it usually ends when the job does — a resignation, retrenchment or retirement can quietly remove a large slice of protection on exactly the day risk goes up.
Try it with your own numbers
Enter your annual income to see the 10–15× rule-of-thumb range for your numbers — then, if you like, build the needs-based version: debts plus years of income support, minus the cover and assets already in place. It shows an indicative gap or surplus, not advice. Inputs stay on your device.
Your numbers stay on your device — nothing you type here is sent or stored. This is a generic guideline calculation, not advice. For advice, speak to a vetted, FSCA-registered planner.
Terms used on this page
- group life cover
- Life cover provided through an employer. It usually ends when the job does — worth knowing before counting it as permanent.
Reviewed July 2026