Wife and 3 kids - how much life assurance cover do I need?

[rapid]

I am looking to take out a life assurance (insurance?) policy so that my family is looked after in the event of the death of either myself or my wife. We have three kids. At the moment, I am the only one in paid employment. We have a seperate mortgage protection policy.

Typically, how much level of cover is needed in these circumstances?

PS - I am looking at taking out a dual life policy, indexed linked, with a conversion option at the end of the term.

Thanks for any advice.

 

[ClubMan]

There are a few existing threads on more or less the same question already which might be worth searching/browsing for. Obviously the specific level/amount of cover will vary from one individual/family to another. But maybe you are looking for some general rule of thumb like "x times your annual salary" or something like that?

 

[Jimbobp]

You should talk to a qualified advisor, (pref one that isn't a tied agent to one company or to a bank) they will be able to take a holistic approach to what protection needs you require and take into consideration your kids ages etc. I would consider a whole of life policy rather than a term policy (which can be a bit of a false economy). Eagle star do a stripped down version of this type of policy. For disclosure purposes I am a broker/advisor.

 

[DrMoriarty]

I would consider a whole of life policy rather than a term policy (which can be a bit of a false economy).

With respect, Jimbobp, I'm surprised that you can offer that recommendation without even knowing the poster's age. It certainly contradicts the usual "buy term and invest the difference" consensus. How do you see term insurance as a "false economy"?

 

[Jimbobp]

Obviously each case is different Dr. M, but depending on the client I would always recommend a guaranteed WOL policy over a convertible term. The term policy maybe cheaper in the short term, but over the life of the policy and taking into account two or three reviews a term policy can become more expensive than a WOL policy. It can also be more restrictive, as the company will stipulate at the start when the policy can be converted - getting married, mortgage increase etc. By the way, I'm not offering particular advise to this client. I don't know him! I'm just giving my opinion on a posted question.

 

[DrMoriarty]

Jimbobp — I didn't mean to imply anything, I'm no expert on life insurance and was simply genuinely surprised at the comment. Thanks for the clarification.