Cover schedule
| Debt clearance | £5,000 |
|---|---|
| Income replacement | £350,000 |
| Mortgage repayment | £150,000 |
| Education fund | £30,000 |
| Total need | £535,000 |
| Less existing cover & savings | −£10,000 |
Recommended cover
£530,000
Indicative premium /month
£38.31
The same cover at other ages
| Age when you apply | Monthly premium |
|---|---|
| 35 you | £38.31 |
| 40 | £50.35 |
| 45 | £71.21 |
| 50 | £100.70 |
| 55 | £142.41 |
Your premium is fixed at the age you apply, not recalculated as you get older. Waiting is what costs money.
Level term assurance, healthy applicant. Illustrative only — not a quote.
Why use a life insurance calculator?
Most people in the UK either have no life insurance at all or hold a round number — £100,000, £250,000 — chosen because it sounded sensible rather than because it matched their commitments. Both mistakes are expensive. Too little cover leaves a partner unable to keep the mortgage going; too much means paying premiums for decades on protection you never needed.
This calculator sizes your cover from your real financial picture: what you owe, what your household lives on, what is left on the mortgage, and what you would want set aside for each child’s education. It then subtracts what you already have — existing policies, death-in-service benefits and accessible savings — so you only insure the genuine gap.
The premium shown is an indicative figure for level term assurance, the simplest and cheapest form of life insurance in the UK: the payout stays fixed for a set term and the policy simply ends when the term does. Decreasing term cover (which tracks a repayment mortgage down) is usually cheaper still.
How the calculation works: the DIME method
The calculator uses the DIME framework, a standard approach used by financial planners to size life cover. DIME stands for Debt, Income, Mortgage and Education — the four commitments that survive you.
Debt covers everything outside the mortgage: car finance, personal loans, credit cards and overdrafts, so they are cleared immediately rather than pursued against your estate. Income is your annual after-tax income multiplied by the number of years your household would need to replace it — ten years is a common choice for families with young children, five for households where a partner could realistically re-establish income sooner. Mortgage is your outstanding balance, so the family home is paid off outright. Education is a lump sum per child; £30,000 per child is a reasonable UK baseline covering school-age support through to university living costs, though private schooling changes the figure dramatically.
From that total the calculator deducts your existing life cover (including any death-in-service benefit from your employer, typically 2–4× salary) and savings that could realistically be spent. The result is rounded up to the nearest £10,000 — the increments in which UK insurers actually sell cover.
Frequently asked questions
For a healthy non-smoker in their early thirties, £200,000 of level term cover over 20 years typically costs in the region of £10–£15 per month. Price rises steeply with age and roughly doubles for smokers. The figure this calculator shows is indicative — real quotes depend on health, occupation and the insurer’s underwriting.
The payout itself is free of income tax and capital gains tax. However, it can form part of your estate for inheritance tax purposes. Writing the policy in trust — which most UK insurers arrange for free — keeps the payout outside your estate and gets money to your family faster, without waiting for probate.
Death-in-service (typically 2–4× salary) is valuable but it disappears when you change jobs, and for most families it falls well short of a mortgage balance plus years of income replacement. Enter it in the “existing cover” field and the calculator will show whether a gap remains.
Level term pays the same sum whenever you die within the term. Decreasing term shrinks over time, usually in line with a repayment mortgage, and is cheaper. A common UK setup is decreasing cover matched to the mortgage plus a separate level policy for family income.
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Two single policies usually cost only slightly more than one joint policy but pay out twice — once on each death — and survive a separation. Most UK advisers recommend separate single policies for couples where budget allows.
Where these figures come from
The tax and bereavement-benefit figures on this page are taken from the bodies that set them, and checked against those bodies rather than against other websites.
- HM Revenue & Customsinheritance tax, and how writing a policy in trust keeps the payout outside your estate
- GOV.UKBereavement Support Payment — what the state actually pays a surviving partner
This tool provides general information and indicative figures only. It is not financial advice, not a quote, and no insurer is affiliated with it. Premiums shown are illustrative estimates for a healthy applicant on level term assurance; actual premiums depend on underwriting. Consider speaking to an FCA-regulated adviser before buying cover.