What is a good amount of life insurance? (3 ways to calculate)

What is a good amount of life insurance? (3 ways to calculate)

What is a good amount of life insurance is one of the most often asked questions we get at Pinnacle Life. And unfortunately, there is no one correct answer. But there are lots of possible answers!

The most important thing to consider is that some life insurance is better than none. If the worst thing happens and you’re no longer around to support your family financially, your loved ones are going to be grateful for any financial support. The more you can leave behind, the better.

How much have other people asked for?

What’s right for you might not be exactly right for your mate for a multitude of reasons, but it might be a good place to start.

We can tell you what amount of Life Insurance over 90,000 other kiwis have asked for over the last two years. This is helpful if you just want a ballpark to get started. From the data we’ve gathered – courtesy of Chatswood, we know that the most common amount of cover is $500,000 across all ages and genders.

If you want to know how much people of your age and gender have chosen, take a look at our compare your cover tool.

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But what’s a good amount for me?

Because we know this is the question most people have when it comes to life insurance, we developed a super cool life insurance advice tool that will help you work out exactly how much cover is right for you.

We call it a tool because it helps you work out what you need for yourself; it’s a tool for you! It’s online financial advice, so you don’t need to talk to anyone unless you want to. You will need to enter some information about your financial situation and who matters to you so that we can recommend some options.

The kind of things we consider are:

  • who do you want looked after financially if you’re not there? How long will you need to provide for them financially?
  • what will they need money for – rent, food, utility bills, school fees?
  • what debt will need repaying – mortgage, car loan, credit card?
  • possible future expenses – tertiary or university fees, family holiday?

You can, of course, consider these things for yourself and work out what amount of cover is right for you. Our advice just makes it easier!

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Fit your budget

The more cover you have, the higher your premiums will be. For example, a 37-year-old, non-smoking female would pay $15.60 per month in the first year for $250,000 of Pinnacle Life cover, $23.09 for $500,000 of cover and $36.65 for $1million. Premiums for men are also higher than for women.

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*Monthly premiums as of 15 June 2021Don’t stretch your budget to pay life insurance premiums, just go for the maximum amount of cover you can afford. You should also consider that each year as you get older, your premiums increase. Your cover also increases with inflation each year, which means your premiums do too unless you choose to turn this option off. So, make sure you think about future affordability as well.

Having life insurance means that you can focus on living and loving your family and not worrying about what their life would be like financially without you. Remember, some insurance is better than none.

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Need help working out what life insurance you need?

Use our tool to do your own advice.
No need to talk to anyone (that means you can do it in your pajamas).

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