Financial Services > Life lnsurance > Questions > How much should I insure my life for?

How much should I insure my life for?

You can insure your life for however much you think it is worth, as long as there is someone willing to underwrite the policy. Most people take out a policy that is worth between six and eight times their annual salary. For example, if you earn £20,000 per year, you would be taking out £120,000 to £160,000 worth of insurance.

Naturally, the more insurance you take out, the higher the monthly premium. It is also important to remember that your policy will only pay out when you die - there is no way to retrieve the money otherwise.

As with any financial product, it is always worth shopping around to get the best quote, and thinking carefully about what the cover is for - is it just for the mortgage or is it for other things as well?

Remember that many endowment mortgages include an element of life insurance, so your mortgage would actually be paid off anyway if you were to die before the end of the mortgage term.