If you’ve searched this before, you’ve probably seen the same answer repeated everywhere:
“You need 10 to 15 times your annual salary.”
That rule comes mainly from the UK and US.
In those countries, life insurance often has to clear the mortgage, pay off debts, cover funeral costs, and still leave enough money behind to replace the income of the deceased.
In Ireland, it’s different.
For most homeowners, mortgage protection is mandatory. That means the mortgage will already be cleared if you die.
So if your biggest debt is covered, the 10–15 times salary rule can easily overestimate what your family actually needs.
On the other hand, for some families, it can underestimate the real problem, which isn’t debt, it’s lost income.
Life insurance isn’t about chasing a big round number.
It’s about answering one practical question:
If I wasn’t here tomorrow, how much income would my family need each month and for how many years?
Once you answer that properly, the right cover amount becomes much clearer.
Start With Income, Not Multiples
Instead of multiplying your salary by an arbitrary number, it’s usually better to think in terms of income replacement.
In simple terms:
How much money comes into the household each month because of you?
And if that stopped, how much of it would still need to be replaced?
Your family wouldn’t need 100% of your income forever.
Your personal expenses would disappear.
You wouldn’t be commuting, paying for lunches out, gym memberships, clothes or your own car insurance.
But the core household costs would still exist.
The mortgage may already be covered by mortgage protection. The electricity bill won’t be.
School costs, food, childcare, sports, holidays, etc., because life goes on.
So the real job of life insurance in Ireland is usually this:
Replace enough of your net income to keep the household steady until your children are financially independent.
That’s why I tend to look at:
- Your annual net income, not gross
- The age of your youngest child
- A sensible reduction to reflect the personal costs that would no longer apply
It’s not complicated. It just needs to be thought through properly.
How Long Should Life Insurance Last?
Once you know roughly how much income needs to be replaced each year, the next question is how long that support should last.
For most families in Ireland, the answer usually centres on children.
Life insurance isn’t designed to fund grandchildren.
It’s there to carry your household through the years when your income would have mattered most.
A simple and practical benchmark is this:
Cover your family until your youngest child is financially independent.
In Ireland, that’s often around age 25.
- Most children are through education or training by then
- Many are working or financially self-sufficient
- Household financial pressure typically reduces significantly
If your youngest child is 5, that suggests around 20 years of cover.
If they’re 15, you may only need 10 years.
It doesn’t have to be exact, it just needs to be sensible.
A Simple Ready Reckoner
Our calculator below follows that income-replacement logic.
It looks at:
- Your annual net income
- The age of your youngest child
- A reasonable reduction to reflect personal expenses that would no longer apply
It won’t replace tailored advice, but t it will give you a grounded starting point — based on how Irish family protection should be structured.
What If You Already Have Death in Service Through Work?
If your employer provides group life cover (often called death in service), that absolutely counts.
Most schemes provide three to four times your salary.
That can significantly reduce the amount of personal life insurance you need.
But there are a few things to keep in mind.
- Employer cover usually ends when you leave the job.
- It can’t be assigned to a mortgage.
- The payout is fixed as a multiple of your salary so it isn’t tailored to your family’s actual needs.
When I calculate a recommendation, I treat death in service as a bonus and subtract it from the overall requirement rather than ignoring it.
If you’d like a deeper look at how group life cover works, you can read more here:
Does death in service replace personal life insurance? →
Lump Sum or Monthly Income?
Once you have a ballpark figure, there are two main ways to structure the cover.
Lump Sum Life Insurance
This pays a single lump-sum amount if you die during the term.
It gives flexibility.
Your family can invest it, reduce debts, or use it however they see fit.
The challenge is that a large lump sum creates responsibility at a time when your family is already under pressure.
Managing and drawing down a substantial payout isn’t always straightforward.
Monthly Income Benefit
An alternative is Monthly Income Benefit.
Instead of one large payment, it provides a guaranteed monthly income for a set number of years.
Think of it as replacing your salary rather than creating an investment decision.
In many cases, it can also be more cost-effective than an equivalent lump sum.
We compare them in this article:
Monthly Income v Lump Sum Cover
What Does That Level of Cover Actually Cost?
Life insurance in Ireland is generally more affordable than most assume, especially for younger, non-smoking, healthy individuals.
As a broad example, a healthy person in their 40s looking for €500,000 of term cover over 20 years might pay somewhere between €60 and €80 per month.
You can adjust the amount to fit your budget.
Remember, some protection is always better than none.
One Important Detail Most Calculators Don’t Mention
Working out the right number is only half the job.
How you apply matters too.
If you have any medical history, your occupation carries risk, or you’re applying for higher levels of cover, different insurers can assess the same case very differently.
Getting cover isn’t the same as getting the best terms available.
If you’d like advice based on your health, income and cover needs, complete the short questionnaire below, and we’ll come back to you with a personalised recommendation.
Written by Nick McGowan, QFA RPA APA
Nick is a qualified financial advisor and founder of Lion.ie, an Irish life insurance and income protection brokerage based in Tullamore.
He’s been helping people get fair, transparent cover for over 15 years — and was named Protection Broker of the Year 2022.
If you’d like straight answers without the sales pitch, learn more about Nick here.
