Tool
Life cover amount
How much life cover do I need?
The right amount is not a round number. It is what the family would need if your income were missing. Find it in three steps.
- The sum comes in three steps: the debts, plus the income that would be missing times the years it is needed, minus what exists already.
- For €120,000 of loans, €1,500 a month for 10 years and €50,000 of savings, you need €250,000.
- At 38, the net cost of the risk is €542 a year.
Calculate
The three steps
First, the debts that would remain: the balance of the mortgage and the other loans. Second, the income that would be missing, times the years the family would need it, until the children stand on their own feet. Third, what exists already: savings, a group policy at work, not the home you live in.
The rough rule of «8 to 12 times the yearly income» does not come from any public figure. The calculator shows it beside the sum only to compare: your own sum is always better.
What the companies print on their sites
- Interamerican: Simple one-year life cover: a person of 40, an office worker, sum insured €50,000 - €10.11 a month, and a policy fee of €30 in the first year (on its site)
- Interamerican: Example of the insurer: aged 36, sum insured €200,000 - €47.66 a month (on its site)
- Interamerican: Example of the insurer: aged 32, sum insured €100,000 - €50 a month (on its site)
How we work it out
The sum is the debts, plus the monthly income times twelve times the years, minus what exists, rounded up to the 10,000, the step the comparison prices in.
The net cost of the risk is the mean chance of death over the 20 years of the cover, from the life table of Eurostat for Greece, times the capital, for every age from 18 to 70 and for capitals in steps of 50,000 euros. Between two capitals the sum follows a straight line. A cover of 10 years or more pays no premium tax. How we calculate.
Sources
Text size
Frequently asked questions
What people usually ask
01 Does the “ten times income” rule hold?
It is a first size, not an answer. A family with a paid-off home and grown children needs less; one with a mortgage and a baby needs more. The sum of the three steps is your own.
02 Do I count the home we live in under “what exists already”?
No. The family will go on living there. Count the savings, the group policy at work and any other sum that would be paid.
03 For how many years should I take it?
Until the children stand on their own feet, or until the loan ends, whichever comes later. Usually 15 to 25 years.
04 What does life cover cost?
At 35, for €250,000 and 20 years, the net cost of the risk is €400 a year, from the life table of Eurostat. It is not a premium: the company adds its costs and its profit, and nobody publishes them. Further down, the prices the companies print themselves.
05 Does it change if I smoke?
The table of Eurostat does not split smokers from non-smokers, and no company publishes how much its price changes for a smoker. So the cost here does not change. Ask the company.