How much life insurance do I need?

There's no set amount of life insurance that's right for everyone. How much you need depends on your family, mortgage, debts and the costs you'd like to help cover if you died. One way to start is to add up the costs you'd want your life insurance to cover after you die. Then take away any savings or life cover you already have. You should think about:

• your mortgage
• loans and other debts
• everyday household bills
• childcare costs
• how long your family will need financial help
• savings you already have
• any life insurance you get through work

How do I work out how much life insurance I need?

To work out how much life insurance you may need, think about what your family would need help paying for if you died. You can break it down into 3 steps:

1. Work out what you'd like to cover

Start by adding up the bigger costs you'd want your life insurance to help with. This could include: your mortgage, loans and other debts, household bills, childcare, future costs for your children and funeral costs. Think about your own family and what they would need. You may not need to include everything on this list.

2. Think about how long your family may need help

If your family relies on the money you earn, think about how long they may need financial help. For example, you might want your life insurance to last until your mortgage is paid off, your children are older or your partner would no longer need to rely on your income. This can help you work out both how much cover you need and how long you may need it for.

3. Take away savings and cover you already have

You may already have money that could help your family. This could include savings, investments, another life insurance policy or life insurance through your employer, sometimes called a death-in-service benefit. Make sure you check if you have this. Keep in mind that death in service type benefit is not guaranteed for life, and would be dependent on staying in that particular job - and could be lost if you are made redundant.

Taking this money away from the amount you'd like to cover can give you a starting point for how much life insurance you may need.

How long do I need life insurance for?

Think about how long someone may rely on you financially or how long you'll have big costs to pay. For example, you might want your cover to last until your mortgage is paid off, your children are older and can support themselves and other large debts are paid off.

Life insurance covers you for a set amount of time. If you die during that time, the policy can pay out.

• Level term life insurance: the payout stays the same throughout the policy, and your monthly payments stay the same too. People often choose this cover to help their family with everyday living costs, childcare, or an interest-only mortgage.
• Decreasing term life insurance: the payout gets smaller over time, while your monthly payments usually stay the same. Because the payout reduces, this type of cover is often cheaper. It's commonly used to protect a repayment mortgage or other debts that get smaller over time.

How much life insurance do I need if I'm over 50?

If you're over 50, you might think over 50 life insurance is your only choice. Life insurance and Over 50 life insurance are different products though and used in different ways. The main differences are the amounts of money involved and how long the cover lasts and whether or not health and lifestyle circumstances have an impact on the cover you're offered. Life Insurance is a medically underwritten product which depends on your health and lifestyle, whereas Over 50s Life Insurance is guaranteed acceptance with no medical, for UK residents aged 50-80

Life insurance usually runs for a set number of years and can provide a larger payout. It can help with bigger costs, such as paying off a mortgage. Over 50 life insurance lasts for the rest of your life and is often used to leave a small gift for loved ones or help with funeral costs. You could choose one type of cover or have both. The right option depends on what matters most to you.

There's no set amount of life insurance you need when you're over 50 but some people consider it to help contribute towards funeral costs, or to leave a small gift to loved ones. Rather than focusing on your age, think about what you'd like the money from your policy to help pay for. You should also consider any savings or existing life cover you already have, as these could reduce the amount of new cover you need.

When should I review my life insurance?

How much life insurance you need can change over time. It's a good idea to check your cover when something important changes in your life. For example, you could review your cover when you:

• get married or enter a civil partnership
• have or adopt a child
• buy a home
• take out a bigger mortgage
• separate or get divorced
• change jobs
• have a big change in income
• pay off your mortgage
• no longer have children who rely on you financially

You may find you need more cover after some life changes and less after others.

Do I need critical illness cover with life insurance?

Critical illness cover is different from life insurance. It can pay out a lump sum if you're diagnosed with one of the illnesses or conditions covered by your policy. Conditions covered vary between insurers and policies.

Critical illness cover could be worth thinking about if you would struggle financially if a serious illness meant you could not work. Check the policy carefully so you understand which illnesses are covered and when it will pay out.

In conclusion

There's no one amount of life insurance that's right for everyone. Your cover should be based on your own needs and what you want to protect. Once you know how much cover you may need, you can look at your options and get a life insurance quote. L&G provide a free online life insurance 'Cover Calculator' tool which is available to Co-op customers when you get a quote online.