How much life insurance you need, once the state has paid its share

The case loaded above is a married parent of 38 with a child at home, £180,000 left on a repayment mortgage, £8,000 of other debts and a family that would need £24,000 a year of replaced income for 15 years. Add £5,000 for a funeral and £20,000 for the children and the household would face £573,000. The surviving partner would receive £9,800 of Bereavement Support Payment (£3,500 at once and 18 monthly payments of £350), and £15,000 of savings is there already, which leaves £548,200 of life cover to find. A level term policy of 15 years on a man of that age pays out in about 3.8% of cases at current death rates, which is why such policies are cheap at that age and why the cover only has to exist for the years the family depends on one income. Change any field and every line moves.

This site does better than the first Google result because it does the sum that comparison sites and brokers skip: it takes off what the state already pays and what an employer already provides before suggesting a cover amount, and it gives the odds of a claim from the official life tables, with no form to fill in. The comparison sites lead to a quote form that asks for a name, an address, a date of birth and health details before any real price; the broker pages that print a table of “average premiums by age” give no source and no method for it.

What the benefit does and does not replace

Bereavement Support Payment is a short bridge, not an income. Spread over its 18 months, the higher rate comes to about £544 a month, which is less than many families spend on a mortgage alone. It ignores earnings and savings, and for a year after the first payment it is not counted against other benefits, so a survivor on Universal Credit keeps both. After that year, what is left of the one-off payment can count as capital. There is no state benefit that clears a mortgage, and since April 2017 none that pays a widowed parent until the children grow up: that is the gap life cover exists to fill.

Two other payments can matter in the first weeks. The <a href="/en/funeral-expenses-payment/">Funeral Expenses Payment</a> helps someone on a qualifying benefit with burial or cremation fees and up to £1,000 of other costs. An employee whose child dies may get Statutory Parental Bereavement Pay. Neither touches the long-term gap, so the calculator counts neither.

Why we show odds and not prices

The price of a policy is the insurer’s view of exactly this probability, adjusted for its own claims experience, its expenses, its profit and what you tell it about your health, job and habits. Those adjustments are private and change week to week. We looked for a price source a website is allowed to republish and found none. Quotes belong to the insurer that gives them and to the broker that collects them. The industry publishes yearly claims statistics, but not under a licence that allows them to be reused here. Pages that print “average monthly cost by age” either credit a comparison site’s own survey or describe their figures as illustrative, with no method. A figure we cannot trace to its owner is not one we print.

The life tables, on the other hand, are public, official and free to reuse under the Open Government Licence. They give, for every age from 0 to 100 and for men and women separately, the probability of dying within the next year, in each of the four nations. Chained year by year over a policy term, they answer the question a buyer can actually use: if I pay for this cover for 25 years, how likely is it that my family ever claims? For most people in their thirties the honest answer is a few percent, which is the whole case for term insurance: a small, known cost against an unlikely event that would be ruinous.

One caution cuts the other way. The tables describe everyone, including people who could not get cover at standard rates. People who buy insurance and pass underwriting tend to die later than the population average, so the odds in these tables are, if anything, higher than the ones an insurer is pricing for a healthy applicant.

The first household shows the two traps of an unmarried couple. Because they have a child for whom Child Benefit is paid, the survivor does qualify for the higher rate of Bereavement Support Payment under the rule GOV.UK sets out for couples living together; a cohabiting couple without children would get nothing. And the death in service of £96,000 carries most of the need, but only for as long as the earner stays in that job. The second household needs a large sum for a short time, which is where a term of eight years is cheap and a joint policy can make sense. The third barely needs new cover at all once the old policy and the savings are counted: the mortgage is small and the income gap is modest.

Level, decreasing or monthly: the shape of the cover

Once the amount is known, the shape follows the debt. A repayment mortgage falls every month, so <a href="/en/mortgage-life-insurance/">decreasing term cover</a> that shrinks with it costs less than level cover of the full loan; an interest-only loan does not fall, so it needs level cover. The income part of the need is a stream, not a lump: <a href="/en/family-income-benefit/">family income benefit</a> pays a monthly sum from the claim to the end of the term, which matches it more closely and usually costs less than a lump sum of the same total. A couple can share one <a href="/en/joint-life-insurance/">joint policy</a> that pays once, at the first death, or hold two single ones that can both pay. And a payout that goes into the estate, rather than to trustees, can be cut by inheritance tax: the <a href="/en/life-insurance-in-trust/">trust calculator</a> shows by how much.

Death is the smaller risk: the sick pay gap

For people of working age, a long spell off work is more likely than death, and the state’s answer is thinner. Since 6 April 2026, Statutory Sick Pay is paid from the first day of absence at £123.25 a week or 80% of average weekly earnings, whichever is lower, for up to 28 weeks. Someone earning £120 a week gets £96.00 a week. After 28 weeks comes New Style ESA, at £95.55 a week for those aged 25 or over during the assessment, if the National Insurance record allows it. For an employee on £2,800 a month with four weeks of company sick pay and £2,000 a month of outgoings, the two years after falling ill bring £10,511 against outgoings of about £48,000: a shortfall of £38,227. The <a href="/en/income-protection-insurance/">income protection timeline</a> works this out week by week, with your employer’s scheme.

What this calculator leaves out

It assumes no interest on the money paid out: a lump sum invested while it is spent would stretch further, and inflation would shrink it, and the two are left to cancel. It does not model Universal Credit, which a survivor on a low income may claim, nor the State Pension the survivor might inherit through a late spouse’s record. It does not price anything, and it cannot tell you whether an insurer will accept you. The tax treatment of a payout depends on whether the policy is written in trust. These limits are set out on the method page.

Sources

Every State benefit rate, tax rule and ONS life table figure behind this calculator and its guides was taken from these GOV.UK, HMRC, FCA and ONS pages, read on 7 November 2026.

• DWP, Benefit and pension rates 2026 to 2027 (GOV.UK)
• GOV.UK, Statutory Sick Pay (SSP)
• GOV.UK, Sickness absences that start before and end on or after 6 April 2026
• GOV.UK, Employment and Support Allowance (ESA)
• GOV.UK, Bereavement Support Payment
• GOV.UK, Funeral Expenses Payment
• GOV.UK, Inheritance Tax
• GOV.UK, Valuing the estate of someone who has died
• GOV.UK, Trusts and taxes
• GOV.UK, Trusts and Inheritance Tax
• GOV.UK, Universal Credit
• Income Tax (Trading and Other Income) Act 2005, section 735 (legislation.gov.uk)
• HMRC Business Income Manual, BIM45525: key person insurance
• FCA, Funeral plans: check your provider is authorised
• FCA Financial Services Register
• ONS, National life tables: UK, 2022 to 2024
• ONS, National life tables: England (Wales, Scotland and Northern Ireland published alongside)
• Open Government Licence v3.0
• FCA, PS21/15: Regulation of funeral plans, final rules
• GOV.UK, Who inherits if someone dies without a will

The parameter file cites 20 pages: the DWP’s benefit and pension rates for 2026 to 2027, GOV.UK’s guides to Bereavement Support Payment, Statutory Sick Pay and New Style ESA, and the ONS national life tables. The engine is tested on every build against hand-checked cases.