Life Insurance Coverage Calculator: A UK Planning Worksheet

How much life insurance cover should you choose? A useful starting point is to write down what your family would need if you died, subtract financial resources that would genuinely be available and decide how long any income support should last.

This guide is a cover-needs worksheet, not an insurer premium calculator or a recommendation. You can work through the figures yourself and use the result as a starting point for an adviser discussion.

Step 1: Add the debts and commitments you want to cover

Start with the outstanding mortgage and any borrowing that would need paying or servicing. Include only debts that your surviving household would actually need help with, not every financial obligation by default.

For a repayment mortgage, mortgage life insurance and decreasing term cover may be worth comparing. An interest-only mortgage or a separate family income need could call for a different arrangement.

Step 2: Estimate the family’s annual shortfall

Consider how much income would be lost, which household costs would remain and what a surviving partner could afford. Take into account childcare, housing costs, travel, food and other essentials rather than assuming your entire current salary must be replaced.

Multiply an estimated annual shortfall by the number of years you want support to continue. This is a basic planning estimate: real needs can change, and you might prefer an income-based policy rather than a single lump sum.

Step 3: Allow for major one-off expenses

You might want to include childcare arrangements, education-related costs, funeral expenses or other commitments. Do not automatically add a fixed national average for every item. Costs and whether the family would need insurance to pay them vary widely.

Step 4: Subtract resources that would really be available

Relevant resources might include accessible savings, existing life policies and death-in-service benefits from employment. Check ownership and beneficiary arrangements. A pension, family home or a jointly owned asset is not necessarily cash your beneficiaries could use immediately.

Worked example: an illustrative cover calculation

Imagine a household with the following planning figures:

The arithmetic is £250,000 + £120,000 − £50,000 = £320,000. This does not mean that £320,000 is the correct insured amount for this family. The result could change after allowing for workplace cover, family spending changes, childcare, inflation, tax or the structure of the actual policy.

Should the amount stay level or reduce over time?

For a mortgage expected to reduce each year, decreasing term insurance may be worth considering. For a set financial benefit intended to remain unchanged during the term, level term life insurance may be more suitable. Some households choose different policies for mortgage and family support needs, but that depends on affordability and circumstances.

What if your family needs monthly income rather than a lump sum?

Some policies are structured to provide a regular income benefit during an insured period rather than a single lump sum. If the real need is replacing household spending until a particular date, ask an adviser to compare the advantages and limitations of a regular-benefit arrangement with lump-sum protection.

How long should the cover last?

Match the term to the financial need: the remaining mortgage years, the period children might depend on you or the point a partner is expected to retire. Our life insurance term guide helps you consider those dates.

Why isn’t this figure an instant insurance quote?

The amount of cover is only one factor affecting premiums. An insurer will normally also consider age, nicotine use, health, occupation and policy duration. Two people needing the same £320,000 benefit may receive very different offers. See our monthly cost guide for more on insurance pricing.

Use your worksheet to start a quotation

Once you have a starting amount and duration, compare life insurance quotes online. This planning worksheet is not a quotation. The comparison service provides initial prices, subject to the insurer’s assessment and final terms.

For a more detailed discussion of family needs, read our how much life insurance do I need? guide or contact our advice team.

Updated October 2026. Illustrative calculations only, not a financial recommendation. Discount Life Cover is a trading style of My Key Finance Ltd, FCA FRN 628996.