I have just had my fourth child and my wife would like me to update our life insurance, How do i work out the amount?

Hi Peter,

Thank you for your question.

Insurance needs are different for each individual and it comes down to what position you want to leave your family in if something was to happen to you. Things to consider when choosing insurance coverage include overall debt, dependents, income, living expenses, education expenses and other factors.

You may decide to change your level of cover based on changes to your lifestyle every year. For example, if you have children and a large mortgage you may decide you need more cover. Alternatively, if you've paid off your mortgage or no longer have financial dependents you may decide that a minimal amount of cover is appropriate.

A Risk Adviser will work with you to identify gaps in your current situation and make insurance recommendations on what they see may be appropriate. As mentioned at the end of the day it is up to you to decide how much you want to leave your loved ones.

If you would like a further detailed chat about this and a complimentary risk review, please contact me on the below details.

Ronald Pratap
Principal Financial Adviser
RP Wealth Management
T: 0434 502 079
E: ronald.pratap@rpwealthmanagement.com.au
W: www.rpwealthmanagement.com.au
F: https://www.facebook.com/RPWealthManagement

Totally agree with the previous answer. One thing to add is ensure you speak to someone you trust and know will provide you an array of options. Many advisers are limited to just 1 or 2 products.

Also this process needs to include a discussion with your wife.

Hope this helps but any questions that you have please let me know.

Agree with all the answers, but don't forget to insure your wife also and look after yourself as well if something untoward was to happen.

This amount should be calculated on essentially covering all expenses to your family over their typical lifetime. That said, the higher the sum insured, the higher the health requirements required by the insurer. In my view $10 million is quite a high limit but if you are healthy, this should present you no problem in getting set and would provide significant financial benefit to your family.