Life Insurance · UK Guide 2026

How much life insurance do I need?

A clear method for estimating how much life insurance cover you might need in the UK in 2026, using the DIME approach — debts, income replacement, mortgage and education or childcare — minus any cover and savings you already have. Information only, with an illustrative worked example.

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Quick answer

How much life insurance do I need?

A common method is DIME: add your Debts, Income to replace, Mortgage and Education or childcare costs, then subtract existing cover and savings.
A simpler rule of thumb is around 10 times your annual income, adjusted for your mortgage and dependants.
Match the term to how long others depend on you — often until the mortgage ends or children are financially independent.
Review your cover after big life events such as a new mortgage, a baby or a pay change.

Method

The DIME method, with a worked example

DIME is a simple checklist for estimating cover. Add up the four amounts, then subtract any life cover and accessible savings you already have. The figures below are round, indicative numbers used only as an example — your own situation will differ.

DIME factor	What to include	Example figure
D — Debts	Loans, credit cards and other debts (excluding the mortgage)	£15,000
I — Income replacement	Annual income × years dependants would need support (e.g. £30,000 × 10)	£300,000
M — Mortgage	Outstanding mortgage balance to clear	£180,000
E — Education / childcare	Future childcare, schooling or university costs	£50,000
Subtotal	Add D + I + M + E	£545,000
Less existing cover & savings	Death-in-service, existing policies, accessible savings	−£95,000
Indicative cover needed	Subtotal minus what you already have	£450,000

Illustrative example only, using round numbers — not a recommendation or a quote. Your figures, term and premium depend on your circumstances and the insurer’s underwriting.

Rule of thumb

The income-multiple shortcut

If a full DIME calculation feels like too much, a widely used shortcut is to take roughly 10 times your annual income as a starting point for the sum assured. On a £30,000 salary that points to around £300,000 of cover. It is only a starting figure: if you have a large mortgage or several young children you may want more, and if you have substantial savings or significant death-in-service cover through work you may need less. Treat the multiple as a sense-check against the DIME total rather than a precise answer, and always factor in cover you already hold. For the bigger picture on how cover works, see the life insurance hub.

Term length

How long should the cover last?

The amount is only half the decision — the term matters just as much. A common approach is to match the term to the longest period during which someone depends on you financially. For mortgage protection that usually means the years left on your mortgage; for family protection it often means until your youngest child is likely to be financially independent, such as finishing education. Picking a term that is too short can leave a gap, while a much longer term than you need adds cost. Many people choose level term cover for income replacement and decreasing term to track a repayment mortgage.

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Keeping it right

Reviewing your cover after life events

How much cover you need is not fixed. It is worth re-running the numbers after any major change — moving home or remortgaging, having a child, a significant pay rise or drop, marriage or divorce, or starting a business. A new mortgage can sharply increase the amount you need, while children growing up and debts being repaid can reduce it. Checking any death-in-service benefit through work is also sensible, as that cover usually ends if you change jobs. Reviewing every few years, and after big events, keeps your protection in line with reality. Browse the life insurance hub for related guides by age, health and cover type.

Common questions

How much life insurance do I need: FAQs

What is the DIME method for life insurance?

DIME stands for Debts, Income replacement, Mortgage and Education or childcare. You add up those four amounts to estimate the cover your family might need, then subtract any existing life cover and accessible savings. It is a simple way to put a figure on your needs rather than guessing.

Is 10 times my salary the right amount of cover?

Around 10 times annual income is a popular rule of thumb and a reasonable starting point, but it is only a guide. A large mortgage or several dependants can push the figure higher, while substantial savings or workplace death-in-service cover can bring it lower. Use it to sense-check a fuller DIME calculation rather than as a precise answer.

Should I include my mortgage in the calculation?

Yes. Clearing the outstanding mortgage is usually one of the largest elements of the cover a family needs, which is why it is the M in DIME. Some people arrange decreasing term cover to track a repayment mortgage, so the cover reduces roughly in line with the balance owed.

Do I need to subtract cover I already have?

It is sensible to. Existing life policies, death-in-service benefit through your employer and accessible savings all reduce the gap you need new cover to fill. Subtracting them avoids over-insuring and paying for more cover than you need. Remember that death-in-service usually stops if you leave the job.

How long should my life insurance term be?

A common approach is to match the term to how long others depend on you — often until the mortgage is repaid or the youngest child is financially independent. Too short a term can leave a gap, while a much longer term than needed adds cost. Many people pick a term that runs to the later of those two milestones.

When should I review how much cover I need?

Review your cover after major life events such as moving home, remortgaging, having a child, a significant change in income, or marriage or divorce. Checking every few years as well helps keep the amount in line with your debts, mortgage and dependants as they change over time.

Can I have too much life insurance?

You can pay for more than you need, which simply costs more in premiums. The aim is to cover the gap your income, debts and family costs would leave, less what you already have. A method like DIME helps you land on a figure that is neither too little nor unnecessarily high.

Information only — not financial advice. The figures on this page are indicative and illustrative only and are not a quote or a recommendation. My Insurance Expert is not an FCA-authorised intermediary and does not arrange or sell policies. Last updated: 2026-06-13

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