Is £300,000–£500,000 of cover enough?

It depends entirely on your mortgage and income. A family with little debt and one income may need less; a family with a large mortgage and two incomes to replace often needs more. The DIME method gives you a figure based on your own situation rather than a generic rule of thumb.

Is death-in-service benefit enough on its own?

Rarely. It’s typically 2–4× salary and disappears the moment you leave the job. For most households with a mortgage and children, it covers only part of the real need.

How long should my policy term be?

Match it to your longest obligation — typically a 25–30 year mortgage, or until your children are financially independent. Many people choose a term that ends around when the mortgage is expected to be repaid.

Should couples get joint or single policies?

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 where budget allows.

2026-07-16

How much life insurance do I need? (DIME method explained)

Q: Does writing a policy in trust cost anything?

No — most UK insurers include it for free as part of the application. It keeps the payout outside your estate for inheritance tax purposes and reaches your family faster, without waiting for probate.

Most people need life cover equal to their outstanding mortgage, other debts, several years of income for the household, and a lump sum per child — minus any life cover and savings they already have. For a typical UK family with a mortgage and children, that lands somewhere between £300,000 and £600,000, but the only number that actually matters is your own: it depends on your mortgage balance, your income, and how many years your family would need to manage without it.

This guide walks through exactly how to work that out yourself. If you just want the answer with your own numbers, the life insurance calculator does this same calculation in under a minute, and nothing you type ever leaves your browser.

Why "10 times your salary" usually gets it wrong

The rule of thumb you'll hear most often is somewhere between 10 and 15 times your salary. The trouble is it ignores the thing that actually determines your need: how much you owe, and how many people depend on your income. Two people on the same salary can have completely different needs — one rents and is debt-free, the other has just bought a house with a £250,000 mortgage and two young children. A flat multiple of salary rarely lands right for either of them.

The DIME method: what advisers actually use

DIME is a framework used by financial planners to size life cover more precisely. The letters stand for the four commitments that outlive you:

Debt — everything outside the mortgage: car finance, personal loans, credit cards, overdrafts. These should be cleared immediately rather than pursued against your estate.

Income — the annual after-tax income your household would need replaced, multiplied by the number of years. Ten years is a common choice for families with young children; five is more typical where a partner could realistically re-establish income sooner.

Mortgage — your outstanding balance, so the family home is paid off outright rather than the family having to move or sell.

Education — 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 considerably.

Add these four together, subtract what you already have (see below), and you're left with the real gap worth insuring.

What to subtract before you land on a final number

Before you settle on a figure, deduct:

Death-in-service benefit through your employer — typically 2–4× salary, but it disappears the moment you change jobs, and for most families with a mortgage it covers only a fraction of the real need.
Any existing personal life cover you already hold.
Accessible savings — anything realistically available to your family without waiting months to unlock it.

Most people are surprised how much bigger the gap is once they actually add this up. A £250,000 mortgage is unremarkable in much of the UK, and most employer death-in-service cover falls well short of that alone.

A worked example

Take a family with two children, a £250,000 mortgage, and a combined income of £45,000. They want ten years of income replaced and £30,000 set aside per child:

Item	Amount
Debt (car finance etc.)	£8,000
Income (£45,000 × 10 years)	£450,000
Mortgage	£250,000
Education (£30,000 × 2 children)	£60,000
Total need	£768,000
Death-in-service benefit	−£90,000
Savings	−£15,000
Real gap	£663,000

That's considerably more than "10 times salary" (£450,000) would suggest — the difference comes down to the mortgage and the years of income the family would genuinely need replaced.

Level term vs decreasing term cover

Once you have a target figure, the next decision is the shape of the policy. Level term assurance pays the same fixed sum whenever you die within the term — simplest, and the right choice for the income-replacement and education portions of your need, since those obligations don't shrink over time. Decreasing term cover falls in value over the term, usually in line with a repayment mortgage, and is cheaper — a common UK setup is decreasing cover matched specifically to the mortgage, paired with a separate level policy for the rest.

Writing your policy in trust

A detail worth not skipping: writing a life insurance policy in trust — which most UK insurers arrange for free — keeps the payout outside your estate for inheritance tax purposes and gets the money to your family faster, without waiting for probate. It's a five-minute form at application time that costs nothing and solves a real problem.

How to use the calculator

The calculator runs this exact DIME calculation automatically, with sensible UK defaults for mortgage, income and education costs already filled in. Adjust the numbers to your own situation — age, mortgage, income, number of children, what you already have — and you'll get both a recommended cover amount and an indicative monthly premium. Try the calculator here — it takes under a minute, and nothing is stored or sent anywhere.