How much Life Insurance do I need?

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Having a Life Insurance policy in place means that your loved ones will be financially protected if you were no longer around to provide for them. However, figuring out exactly how much cover you require can be difficult.

The fact we all have a different set of circumstances adds to the complexity of deciding how much cover is appropriate for your situation.

Our guide breaks down some of the aspects you should consider along with some calculation examples to help you along the way.

Do I need Life Insurance?

Deciding whether you need Life Insurance usually comes down to whether you have financial dependents or not. If you have a partner or children who depend on you financially, then you should consider Life Insurance.

If you were to die unexpectedly, how would their lifestyles change without your income? Mortgage Protection may kick in and clear that debt but that is only one piece of the puzzle.

Without your income, they are likely down thousands of euros each month.

How much Life Insurance do I need?

There are some generic ways of calculating how much Life Insurance you may need. For example, some people recommend insuring 10 x your annual salary as a rule of thumb.

The problem with such methods is that they do not account for personal circumstances. Aspects such as the number of children you have and potential death benefits from employment are not considered.

Calculating how much cover you may need should be on a case-by-case basis.

Below are some aspects to consider as a starting point:

1. Do you have any other Life Insurance policies in place?

If you have any other relevant policies this will impact how much cover you may need. In some cases, you may be covered in a group scheme from your employment. This is a death in service benefit and it will usually pay out a multiple of your salary to your next-of-kin on your death.

2. What age are your children/dependents?

The age of your financial dependents will impact not only how much cover you need but also how long the cover should be in place for. This will be a personal choice but many people decide to put the cover in place until all kids have finished college.

For example, you could choose a term that brings your youngest child to age 24. If your youngest child is aged 2, that would mean a 22-year term on the policy.

3. Will you have any State benefit entitlements?

If married at the time of your death, your spouse would be entitled to the ‘widows’ or ‘surviving Civil Partners’ pension. The full contributory pension for an adult aged under 66 is €213.50 per week as of April, 2022. You are also entitled to an additional €40 per child under age 12 or €48 for those over age 12.

4. Will there be an income from any other assets?

Are there any assets that could provide an income to your family after your death? If so, this is a factor when assessing how much Life Insurance may be required.

Assets that could potentially provide an income could include:

  • Pension benefits
  • Investments
  • Stocks/shares in companies providing dividends
  • Rental income

Once you speak with your advisor and have answers for the above, you are in a better position to assess if you need Life Insurance and calculate how much cover will be sufficient.

Life Insurance - Case Study

To gain a better understanding of how this may look in real life, we have broken down a hypothetical scenario of a married couple trying to calculate how much life cover may be required.

Paul and Siobhan are married and have two children age 2 and 4. Paul is age 40 and Siobhan is age 38. Below we calculate how much cover is required to cover Siobhan financially if Paul were to suddenly die.

Some important points to consider are:

  • Are there other policies in place? Yes. Paul’s employer has a death in service scheme and will pay out 4 x his salary if he was to die. His current salary is €50,000 which would be €200,000 in total.
  • Siobhan would be entitled to the full widows pension.
  • Siobhan would like to leave employment if something were to happen and mind the kids full time.

Siobhan has said that she would need €3,700 total per month to live a comfortable lifestyle with the kids on Paul’s death.

Siobhan has also stated she would like to have cover until her youngest child reaches age 22. That would be 20 years in this case.

With the above knowledge, we can now calculate the cover required for Siobhan.

Monthly Income Required


Death Benefit Scheme | €200,000 total

€200,000/ 20(years) / 12 (months)

€833 per month

Widows Pension


Total Monthly Benefits


Monthly Income Required


Total Monthly Benefits


Shortfall in Income


life insurance case study figures

From here we can calculate the cover required. As the youngest child is age 2, a 20-year term will be required to enable them to reach age 22.

€1,693 x 12 (months) x 20 (years) = €406,000 Life Insurance cover.

total life insurance needed example
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If you need assistance or have any questions about Life Insurance, please contact our team.

Life Insurance - Quote Example

Now that the amount of cover is calculated, we can look at the cost. For this, we take a 40-year-old non-smoker with a conversion option added.


Premium per month

Royal London






quotation prices life insurance

This means that for as little as €8 per week, you and your family could have peace of mind knowing you are safeguarded financially should anything happen.

In many cases, it can be difficult to calculate exactly how much cover you may need. If you would like to speak to our team, please do not hesitate to contact us. We would be happy to answer any questions you may have.

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Should I consider Income Protection instead?

Income Protection plays a different role than a Life Insurance policy. It covers you should you be unable to work due to sickness, injury, or disability.

Therefore, it provides benefits while you are living rather than for your family when you have passed. However, Income Protection is one of the most important policies you can put in place.

Premiums are eligible for tax relief and benefits are often paid to claimants long-term. It will allow you time to focus on recovering while receiving a percentage of your salary.

What else should I consider?

There is likely not a quick solution when considering how much Life Insurance you may need. In some cases, it may not be necessary to have any cover at all.

However, if you have any financial dependents, you consider putting a policy in place. How much cover you require will depend on the factors we looked at above such as the age of your kids and what your surviving spouse or partner may need.

Start by using the framework we provided to calculate roughly how much cover you may need. You could also contact our team directly and chat through potential options. It will allow you to ask any questions you may have and discuss the best course of action.

During the conversation, you may think of other aspects you had not previously considered. It is important to get a full understanding and overview before making any decisions.

We have left some key takeaways below to summarise the above.

Key Takeaways

  • There is no universal answer when it comes to calculating how much life cover is sufficient.
  • Deciding what age you would like your youngest child to be when the cover ends will determine the term of the policy.
  • It is important to ensure that the amount of cover you choose will be sufficient for your surviving partner and dependants.
  • Speaking with an advisor will help you assess all potential options. A combination of Life Insurance and Income Protection may be more suitable in some cases.
<b>Ian Kennedy QFA</b> <br>Senior Insurance Advisor</br>
Ian Kennedy QFA
Senior Insurance Advisor

Ian is one of our Senior Financial Advisors at emero and has worked within the financial sector for the past five years. If you would like to chat with Ian directly, please get in touch with him at 

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