Table of Contents
Quick answer
Life-insurance sum assured should start with the financial loss your family would face, not a fixed multiple of salary. Map income support, debts, dependants, education needs, existing assets and available benefits, then subtract resources that would still be usable.
Start with the job the money must do
The sum assured is a pool of money, not a score. Ask what it needs to fund if you die or suffer the covered event: household income for a period, an outstanding debt, care for dependants, education costs or an orderly move to a smaller budget.
The answer changes when your family, debt, income or existing protection changes. A salary multiple can be a rough starting point, but it cannot see those differences.
Build the estimate from both sides
List the needs and resources separately:
| Need or resource | What to include |
|---|---|
| Income need | household support and time needed to adjust |
| Debt | balances that should not fall on dependants |
| Future costs | education, care or relocation needs |
| Existing resources | savings, investments, benefits and current cover |
Do not count an asset at its best possible value if selling it would take time or affect the family home. State the assumptions next to the figure.
Check the policy wording after the estimate
The number you calculate does not guarantee a claim. Confirm who is insured, what event is covered, exclusions, claim requirements, policy term, renewal and beneficiary details. Keep the calculation with the policy documents so the next review can update it.
A smaller amount that can be maintained may be more useful than a large amount that lapses after one difficult year. The payment must survive real household conditions.
Questions readers usually ask
How many times my salary should life insurance cover?
Should I include my mortgage?
Do I subtract savings from the sum assured?
When should I review the estimate?
Does the estimate guarantee the policy payout?
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Sources and verification notes
This article was prepared from the official pages below with an initial fact cutoff of 24 August 2026. Rates, limits, eligibility, operating hours and product terms can change; recheck the current source before acting. This is general financial education, not personalised advice.
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