Insurance coverage checkup

Gap in your life cover

Total$983,000
Income replacement target
$750,000
Disability cover (yearly benefit)
$48,750
Umbrella / liability cover
$375,000
Assets offsetting the need
$125,000
Gap in your life cover
$983,000

A checkup, not a quote. Review cover after a move, a new child, a pay change or a new loan.

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The short answer

Insurance exists for losses you could not absorb. Size life cover against income, debts and dependants less the assets already in place; size disability against the income itself; size liability against everything you own.

The cover most households under-buy

Disability cover is the common gap: losing the ability to earn is more likely than dying during working years, and it removes the income while the expenses continue. Employer cover is usually partial and ends with the job.

Cover you can usually skip

  • Extended warranties and low-value item cover — self-insure small losses.

  • Whole-life products bought for the investment element rather than the cover.

  • Duplicate cover from a card, employer and standalone policy for the same risk.

The formula

Life gap = (income x 10) + mortgage + other debt + (children x education allowance) - savings - existing cover. Disability target = 65% of income. Liability = max(300k, income x 5).

FAQ

First time home buyer steps from budget to closing

Before viewing homes, review income, debt, savings, credit, and the full monthly cost of ownership. A mortgage payment is only one component; property taxes, homeowners insurance, mortgage insurance, HOA dues, utilities, maintenance, and repairs may also apply. A debt to income ratio calculator provides a planning estimate, but a lender’s underwriting rules determine how debts and income are treated for a loan application.

Mortgage preapproval can help define a conditional financing range, but it is not final approval or a requirement to spend the full amount. Compare loan estimates from lenders, including the interest rate, annual percentage rate, points, lender fees, cash to close, and projected payment. An offer may involve earnest money, inspection terms, financing conditions, appraisal issues, and title review. Escrow and title insurance serve different purposes and should be reviewed separately.

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