Is more really better? While it may seem like having ample life insurance is a blessing, it may actually be detrimental in some cases.

While protecting your family and/or loved ones should always be at the forefront, having cover can have its drawbacks. We'll explore the concept of having too much life insurance and discuss the potential problems of excessive cover.

Compare term life insurance online

How much Life Insurance is enough?

Figuring out how much cover you need can be tricky. While you want adequate protection, at the same time, you don’t want to overspend on cover you may not need.

The best way to determine how much cover you need is to consider your financial obligations. This includes any outstanding debts, such as a mortgage or car loan, and ongoing expenses that your loved ones would need help to cover should you pass away.

Ideally, life insurance should be enough to cover funeral costs and all outstanding debts. Additionally, it should provide enough of a financial buffer so that your family and/or loved ones can maintain their lifestyle if you are no longer around.

Calculating your cover needs

With everything on the table, it’s time to start crunching the numbers. A general rule of thumb, according to some experts, is 10 times your annual income.

If you have a mortgage, consider how much debt you still owe and how long it will take to pay it off. Then, add any debt payments associated with car loans or credit cards etc. Don’t forget about other monthly bills like utilities and groceries.

Next, think about your annual income and the impact on your family/loved ones. This should give you a good estimate of the amount of cover you need.

Life Insurance from leading brands

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance
  • Scottish Widows

Having too much Life Insurance

Though having more cover can provide peace of mind, it also has some drawbacks:

Unnecessary expenses: If you have too much life insurance, you may be paying for cover that you don’t need. This could mean that your premium payments are taking funds away from other priorities, such as savings or investments.

Cover long after you need it: if you have a term life policy, it may last for longer than you need. If you’re healthy and don’t have any other dependents that require cover, there may be little reason in paying for a policy that you’ll outlive.

High premiums: premiums are based on the amount of cover you buy. If you have too much cover, your premium payments will be higher than they need to be. This can add up over time and take away from other financial goals you may have set for yourself.

What our customers say

Having too little Life Insurance

On the other hand, not having enough life cover can leave your loved ones in a difficult financial situation.

Inadequate cover: If you don’t have enough cover, it could mean that your family/loved ones are left without the financial resources they need to stay afloat. This could include not having enough money to pay off any outstanding debts or cover basic living expenses.

No long-term security: If you pass away, having adequate life insurance can provide financial security for your family/loved ones in the long-term.

Financial burden for your family/loved ones: They may need to take on the burden of paying for any outstanding debts or cover other costs. This can include mortgage payments which they may not be able to afford.

What type of cover should I buy?

When it comes to buying protection, there are a few options to consider. The two main types of cover are term life and whole life insurance.

Term life insurance is the most popular option and usually offers the most affordable fixed premiums. This type of policy will enable you to be covered for a specified period of time, such as 10, 20, or 30+ years.

Whole life insurance offers permanent cover and your premiums remain the same for the duration of the policy. This type of policy also has a cash value component that can be accessed.

Premiums are fixed for these types of cover, unless you opt for an increasing policy. This is known as indexation

The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit.

If you are facing financial difficulty, please contact your insurer before cancelling your policy or letting it lapse. They may have options available to help you remain covered.

Talk to a life insurance expert today...

How much does Life Insurance cost?

The cost of life insurance can depend on a variety of factors, such as your age, health, lifestyle and the amount of cover you need. Generally speaking, the younger and healthier you are, the lower your premiums will be. Even more, if you opt for a term life policy, your premium payments may be lower.

There's a few ways you can save money on cover, such as:

Shop around: Different insurers offer different rates so it’s worth doing your research to find the best policy for you.

Take out cover early: Buying cover when you’re young and healthy likely means your premiums will be lower. As health has a big impact on the cost of life insurance, you may benefit from getting cover early.

Choose the right amount of cover: Having too much or too little cover can be costly. Make sure you have sufficient cover for your needs but don’t go overboard with the amount of cover as this can add to your premium payments.

Review your cover regularly: As your circumstances change, so should your life insurance cover. Make sure you review your policy and adjust as needed.

Take advantage of discounts: Many insurers offer discounts for policyholders who are non-smokers, have a healthy lifestyle or have minor health conditions.

The bottom line

All in all, life insurance can be an essential financial safety net for your family/loved ones. Having the right amount of life insurance cover is vital to ensure that they have the help they need in the event of your death.

If you're unsure about your options, we have a whole host of articles to help you understand the ins and outs of life insurance. You can also speak to our advisers. They can talk you through the different types of cover so that you can make an informed decision.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

Request a callback

Apply with advice

Critical Illness Cover: Add-on or standalone policy?

Prev article

Life Insurance for a lifetime: planning for the unexpected

Next article