You may think it a good idea to insure your life for £100,000 because it sounds like a lot of money. But with the rising cost of living, what will this be worth when your family come to need it? Could it pay off the balance on your mortgage, your loans and credit cards and still leave enough for them to live comfortably?

To calculate the amount of cover you need, you should work out how much money you need to live on. Think about the cost of:  

• your mortgage or rent
• household bills and food
• other monthly bills such as mobile phone, gym fees etc. 
• day-to-day spending
• inflation, and how much these costs might rise in the future.

If you have children, you might also want to think about how long they will be financially dependant on you and how much it would cost to see them through their education.

Don’t forget, if your employer provides you with some cover you may wish to take this into account and deduct the amount they will pay out from the total you calculate.