How much life insurance do you need with a mortgage and children?
How much life insurance you need in the UK with a mortgage and kids — the mortgage, income-multiple and DIME rules of thumb, worked through honestly.
How much life insurance do you need with a mortgage and children?
There's no single right number, but there is a sensible way to reach yours. The goal of life insurance is simple: if you died, the payout should clear what your family owes and replace what your income was paying for — for as long as they'd need it. With a mortgage and children, that's usually a six-figure sum. Here's how to size it without guessing.
Three rules of thumb, and what each one misses
1. Cover the mortgage. The starting point is your outstanding mortgage balance — the debt you'd want cleared so your family could stay in the home. If you have a repayment mortgage, the balance falls each year, so decreasing term cover (which falls in step) is usually cheaper than a fixed payout. On an interest-only mortgage the balance doesn't fall, so you'd size level cover to the full amount.
2. A multiple of your income. A common UK rule of thumb is 10 times your annual salary. It's a quick sanity check, not a precise answer — it ignores your actual debts, your partner's income, and how many years your children have left at home. Treat it as a floor to test your figure against.
3. The DIME method. More thorough, and worth five minutes: add up Debts (loans, cards), Income (your salary times the years your family would need replacing — often until the youngest child is 18 or 21), Mortgage (the balance), and Education or childcare costs. The total is a realistic cover amount.
A worked example
Take a couple with a £220,000 mortgage, two children aged 4 and 7, and one earner on £40,000.
- Mortgage: £220,000
- Income replacement (£40,000 for the ~14 years until the youngest turns 18): £560,000
- Childcare and education top-up: £40,000
- Other debts: £10,000
That's around £830,000 of cover. It looks large, but term life insurance is priced on age and health, not the sum assured alone — a healthy non-smoker in their 30s often pays a few pounds a month per £100,000. Rounding to a level or decreasing term policy over 20–25 years is the usual shape.
Things that change the number
- A working partner reduces how much income you need to replace — size each person's cover to their share.
- Writing the policy in trust keeps the payout outside your estate, so it's normally free of inheritance tax and reaches your family faster.
- State support is thin. Bereavement Support Payment is time-limited, so don't count on it to cover a mortgage.
How the Aviva ChatGPT app helps
Once you have a target figure, the next step is a price. The Aviva ChatGPT app gives you a life insurance quote without leaving ChatGPT. When you're ready to buy, you complete your purchase on aviva.com.
To try it, install it from the ChatGPT App tab (or go to chatgpt.com/apps), search "Aviva", and ask in your own words — for example, "What would £250,000 of decreasing term life insurance cost for a 36-year-old non-smoker over 20 years?"
FAQ
Is 10 times my salary enough with a mortgage and kids? Sometimes, but check it against the DIME total — if your mortgage is large or your children are young, 10x income can fall short of covering both the debt and years of lost income.
Should the cover match my mortgage term? A common approach is one policy sized to the mortgage over its term, plus separate family cover that runs until your children are financially independent.