“How much coverage should I get?” is the question I hear most, and the honest answer is: it depends on what you’re protecting.
Rules of thumb give a number fast. They don’t tell you whether it’s right for your life. A better approach is to build the number from what your family would actually need if your income stopped.
Part 1: Replace the income
How many years would your family need your income to continue while they adjust? Until the children are independent? Until a spouse can return to work? Multiply your annual contribution to the household by that number of years.
Part 2: Clear the debts
Add what you owe that would pass to someone else: housing loan, car loan, cards, personal loans, and any informal loans. These shouldn’t become your family’s problem on the worst day of their lives.
Part 3: Fund the goals
Add the future costs you’ve already promised yourself: education for your children, support for your parents, any commitments you’d want honoured.
Part 4: Cover final expenses
A funeral and settling affairs come with immediate bills. Add a reasonable amount so nobody has to borrow in the first week.
Then subtract what exists
Take away what’s already in place: existing life insurance, group cover from your employer (which usually ends if you leave), and savings you’d be willing to use. What’s left is your gap.
Two honest cautions
The answer is a range, not a number. Run a conservative and a comfortable version.
It must be payable. The right coverage is the one you can keep paying in your tightest month. A smaller plan you hold beats a larger one that lapses. Term insurance often delivers the most protection per peso for a defined period.
Do it this week
Write the four parts on a page. Total them. Subtract what you have. Take that number to an advisor and ask them to show you the cost of covering it in two ways: term and permanent.
You’ll be shopping for an answer you’ve already worked out, which is the best position to buy from.