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22 Nov 2021

How much insurance do you need?

We’re often asked how much insurance people really need, and there is no one-size-fits-all answer. There’s a lot to think about, depending on your unique circumstances.  So, here are a few questions to start you off.

Who depends on you?

Many people start thinking about insurance when they have more people relying on them, like kids or a partner.

Think about who could be affected if you were unable to work for an extended period of time, or if you were not around anymore. Would your partner struggle to pay the bills, or would your kids find it harder to complete their education? 

A good place to start, when it comes to life insurance, is to consider how much money you’d like to leave to your family, should something happen to you. This depends on things like the level of mortgage and/or personal debt you have in place, your family’s current and future financial goals (e.g., children’s tertiary education), and how much income you’d like to replace based on your everyday expenses and longer-term financial commitments. 

You can ask yourself similar questions when you’re thinking about income protection: who would struggle if you weren’t getting any income? 

Having children or getting married are also typical triggers for an insurance review, if you already have some cover in place: you may need to increase the insured amount or take out other types of insurance to cater for your dependents. Get in touch if you’d like to explore your options. 

What bills do you have?

Think about what your regular outgoings look like. Do you need to pay rent, a mortgage, any other loans or business debt? If you weren’t earning, how would you cover those? 

Working out the basic minimum amount of outgoings you’d need to cover each month will give you a good guide to how much income protection cover you need. Even if you have good income protection in place, it’s important to check in on this regularly because our expenses change over our lifetimes. 

These expenses can also guide how much life cover is appropriate: your family may use the lump-sum amount to cover everyday expenses until they get back on their feet.

How resilient are you?

Your financial resilience is part of the insurance equation. If you have a number of assets, and money in savings, you’ll be able to weather a financial blow more easily than someone who uses all their income to service debt or meet daily living expenses. As you progress through life, it can be worth examining your capacity to “self insure” with us – we can look at whether your increased resilience means you could switch to a longer stand-down period for your income protection, for example. 

What are your goals?

What are you working towards, and what might get in the way of that? If you’re saving for a house, you might need to ensure you have enough income protection insurance to allow you to keep progressing towards that goal even if you were off work. If your goal is to build up a significant estate to leave to your children, a good life insurance policy could be a way to make sure that happens even if you do not have the time you expect to get there. Insurance can also make sure your business goals stay on track.

Like to talk?

Depending on your individual circumstances and current level of cover, we can help you determine how insurance can help you meet your goals. Get in touch with us if you have any questions, or would like to review what you have in place.



Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Link Financial Group Ltd trading as Mortgage Link and Insurance Link FSP 696731 holds a licence issued by the Financial Markets Authority to provide financial advice. Insurance Link (NZ) FSP 446867 is authorised by that licence to provide financial advice. Please visit for more information and Disclosure information.