Insurance & Security Calculators

Cover is either enough or it is decoration

Underinsurance is the most common and most consequential mistake in personal finance. A policy sized at two or three times annual income feels responsible and is close to useless: it covers a funeral and perhaps a year of expenses, then leaves dependants exactly where they would have been.

The human life value method starts from the right question — how much capital would need to be invested to replace this income for the remaining working years, after inflation. For most earners with dependants the answer lands somewhere between ten and twenty times annual income, plus outstanding liabilities, minus existing assets.

Term insurance is the instrument for this because it is pure cover with no investment component, which makes large sums affordable. Endowment and money-back policies bundle insurance with investment and deliver both poorly — the cover is small and the returns typically trail simple alternatives.

On health cover, the number that matters is not the premium but whether the sum insured survives a single serious hospitalisation in a private hospital in your city. Costs have risen faster than most people have revised their policies.

These tools produce a starting figure. Your actual requirement depends on circumstances a calculator cannot see, so treat the output as the beginning of a conversation with a licensed advisor rather than the end of one.