The first question many employees/employers ask when considering relevant life plans is: “How much relevant life cover can I have?”
As it is, this can vary depending on the age and annual salary of the individual to be insured, the cost of premiums (and an employer’s ability and/or willingness to pay for them) and, of course, each individual insurance provider.
So, How Much Relevant Life Cover Can I Have?
Ideally, relevant life cover should be set at a multiple of the employee’s salary.
To achieve this level of cover, most insurance companies offer policies providing benefits totalling up to:
- 15 times the total annual salary of individuals aged 60 and over
- 20 times the total annual salary of individuals aged 50 to 59
- 25 times the total annual salary of individuals aged either 40 to 49 or 36 to 50
- 30 times the total annual salary of individuals aged either up to 40 or up to 35
The chosen level of cover may or may not be enough to cover the insured individual’s mortgage and his/her family’s needs. For instance, household expenses (utilities, etc.), education, lifestyle, and so on. The employee may wish to add additional cover, on a personal basis, to ensure all of his/her family’s needs are fully covered.
It should be noted here that, while lower benefits typically do not require evidence of earnings, higher amounts (some insurers, for instance, set these at £2.5million+ or £3.5million+) may require some form of evidence, like, for example, a P60, the employee’s last 3 pay slips and/or an accountant’s letter.
Naturally, the higher the cover amount, the higher the monthly premiums will be. Premiums may also be affected if the option to add significant illness cover is selected. This may (especially in case of smaller companies) limit potential cover amounts due to budget restrictions.
Finding the perfect Cover Amount
Combining years of experience and with access to a comprehensive range of renowned insurance companies’ relevant life policies, we can assist you and will recommend suitable policies and cover levels – at the right premium.
If you want to give your most valuable employees peace of mind that their families will be adequately protected if something unexpected happens to them, speak to one of our advisors to arrange a no-obligation (free) review on 01279 315 013 today.