How much life insurance do I need?

Even if you don’t have any dependents and aren’t too worried about your debts being paid off after you pass away, you still need to consider how you’re going to manage your twilight years. For example, on top of everyday living expenses, consider how a terminal illness might impact your budget. With the median weekly spend of single adult Kiwis being $645, adding the cost of palliative care to this could be hard to afford without an ongoing income.

With basic living expenses averaging $1,349 per week for Kiwi households, having your household income halved due to your sudden passing could leave your partner burdened with covering any outstanding financial commitments. If you have a mortgage, consider how much your partner could pay if they were on their own.

If you passed suddenly, how long would it take your family to recover some financial stability? Even if you aren’t the main provider, your partner may need to step away from full-time work, which could mean a reduced household income. When working out the amount of cover your loved ones will need, consider both their weekly living expenses as well as any long-term plans you have for your dependent children.

Over the 2021 financial year, the cost-of-living rose 4.0% on average across all Kiwi households. The amount of cover you’ll need should factor in long-term expenses such as any outstanding mortgage, as well as immediate costs that your partner would face without you, such as downsizing or planning your funeral. If you’re old enough to access your superannuation, you should factor this in when working out how much cover you’ll need.