Term insurance cover

If you died tomorrow, how much would your family need? Two standard ways to size a pure term plan.

Recommended cover (human life value)

Buy about $1.5M of term cover

That replaces the $990K of income your family would lose until you’d have retired at 60, clears $100K of loans and funds $50K of goals, less $20K you already have.

Cover until 60, through a pure term plan. Plans that return premiums buy far less cover for the money.

Your age

yrs

Retirement age

yrs

Yearly income after tax

Spent on yourself

The part your family wouldn’t need to replace.

Yearly income growth

Return on the payout

What your family could earn on the money.

Loans to clear

Goals to fund

Children’s education, weddings, in today’s money.

Investments you have

Life cover you have

Income multiple

Used by the income-replacement method.

Two ways to size it

Human life value counts every year of income your family would lose, grown and discounted. Income replacement is a quick rule: 10× your yearly income. Both add loans and goals and subtract what you have.

Cover needed

Income replacement (10×)$730K

Human life value$1.12M

The quick rule falls $390K short for you, because you have 28 working years left.

How this is calculated

Human life value: the present value of what you’d bring home for your family each year until 60, rising 6% a year and discounted at 8%.

HLV = Σ_t=0..27 $45K × (1 + g)^t ÷ (1 + r)^t
cover = HLV + loans + goals − investments − existing cover

Insurers cap cover at a multiple of income that depends on your age; they may offer less than this. Review it when you take a loan, have a child, or your income jumps.