Life Insurance Guide

How much life cover do I need?

Written by Daniel Pretorius Insurance Content Editor Reviewed by Nomsa Dlamini RE5 qualified · 12 years in short-term insurance Updated 17 September 2026 Our editorial standards →

How much life cover do I need?

Enough to clear your debts and replace your income for the years your family would need it. A useful starting point is to add up what you owe, such as your bond and car, plus your family's living costs for several years and future needs like education, then subtract savings and any cover you already have. The right figure is personal, so review it as your life changes.

Key takeaways

  • Aim to cover your debts plus several years of your family's living costs.
  • Include future needs like your children's education.
  • Subtract existing savings and any cover you already have.
  • Under-insuring leaves your family short; over-insuring wastes money each month.
  • Review the amount after big changes like a new bond, a child or a raise.

A simple way to work it out

You do not need a complicated formula. A practical approach is to add up three things and subtract a fourth:

The total is a realistic starting figure for your cover.

Think about the years, not just the debts

Clearing debt is only part of the job. Your family also loses your income, so cover should replace enough of it for them to adjust. A common approach is to plan for the years until your youngest child is independent, or until a surviving partner could reasonably support the household alone. The right number of years is personal, but planning for several is safer than one.

Common mistakes to avoid

Two mistakes are common. The first is insuring for a round number that feels big but bears no relation to your actual needs. The second is buying cover once and never revisiting it, so it drifts out of date. It also helps to separate this from a funeral policy, which handles the smaller, immediate cost of a funeral rather than long-term income replacement.

Review your cover over time

Your need for cover changes through life. It usually rises when you take on a bond or have children, and falls as your debts reduce and your children become independent. Review the amount every few years and after any big change, and adjust it up or down. When you are ready, compare quotes for the amount you have worked out. This is general guidance, not financial advice.

Frequently asked questions

Is there a rule of thumb for how much life cover to buy?
Some people use a multiple of annual income as a rough guide, but that ignores your actual debts and family needs. A better approach is to add up your debts, several years of living costs and future needs, then subtract savings and existing cover. That gives a figure tied to your real situation rather than a generic multiple.
Should life cover pay off my bond?
Usually it should at least be able to. Clearing the bond means your family can stay in the home without the monthly repayment, which is often the biggest single relief. Including your outstanding bond in your cover calculation is a sensible baseline, on top of income replacement for day-to-day living.
Do I need less cover as I get older?
Often yes. As you pay down debt and your children become independent, the amount your family would need usually falls. That is why reviewing your cover every few years matters, so you are not paying for more than you need. Some people reduce cover in later years while keeping a smaller amount in place.
Does my partner need their own life cover?
If your household relies on two incomes, or one partner does unpaid work like childcare, then yes, both usually need cover. Losing either income or that unpaid work would strain the family. Even a stay-at-home parent provides work that would be costly to replace, so their cover is worth considering too.

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