Your bond payment goes off on the first. School fees follow a few days later. Groceries, electricity and support for a parent fill the rest of the month. If your income stopped permanently, which of those costs would disappear?
The amount of life cover you need is the financial shortfall your death would leave, after allowing for suitable assets and existing benefits. There is no salary multiple that answers that accurately for every South African household.
A useful estimate starts with people and expenses, then turns them into a cover amount. ASISA’s Smart About Money guide offers a useful framework for preparing that information.
Who would need support, and for how long?
List everyone who relies on you financially: a partner, children, parents or another dependant. Estimate how long each person may need help. A toddler and a university student create different timelines.
Work from the household’s likely budget after your death, rather than simply replacing your entire gross salary. Some expenses may fall, while childcare or paid assistance may increase. Allow for income a surviving partner can realistically continue earning.
Momentum’s life cover guidance identifies the bond, education and lost earnings as practical starting points. The right balance between those needs is personal.
Separate once-off costs from monthly needs
Make two lists. The first covers amounts needed at or soon after death: debts you want settled, funeral costs and estate administration expenses. The second covers ongoing support, including everyday living costs and education.
Do not count the same expense twice. If your calculation settles the bond in full, remove its instalment from the ongoing household budget. Likewise, avoid adding school fees separately when they are already included in monthly support.
Investec’s explanation of life cover includes debt, dependants’ expenses and estate costs. Tax and estate consequences depend on your circumstances and policy structure; get those amounts checked rather than assuming a payout settles everything automatically.
A rough calculation makes the conversation clearer
Consider a hypothetical household with these needs:
- R900,000 to settle debts.
- R15,000 a month of additional household support for ten years: R1,800,000 before inflation or investment returns.
- R300,000 for education, excluded from that monthly figure.
- R100,000 set aside for immediate and estate-related costs.
The initial total is R3,100,000. If R400,000 of suitable savings and R1,000,000 of confirmed existing life benefits are available for these same needs, the simplified gap is R1,700,000.
That is a starting estimate, not a recommended sum assured. It deliberately leaves out the timing of expenses, inflation, investment returns, fees and any applicable taxes. An adviser needs to model those factors before turning this worksheet into a recommendation. Changing the support period from ten years to fifteen also changes the answer substantially.
Count the cover you have — carefully
Gather your personal policy schedules, employer benefit statement and any credit-life information. Check who receives each benefit, whether it is assigned to a lender and whether it would be available for the expense you are counting.
Assets need similar scrutiny. The family home may have substantial value, but treating it as spendable money assumes someone can and wants to sell it. Savings earmarked for another essential purpose should not silently fund two goals.
Employer cover also needs a continuity plan. MiWayLife explains that group life cover typically ends when employment ends, although conversion options may be available. Check the rules and deadlines before changing jobs.
Build a plan you can maintain
A cover amount is only useful if the premiums remain affordable. Ask how both the premium and benefit may increase, and compare the future cost as well as the starting debit order.
Inflation gradually reduces what a fixed payout can buy. 1Life’s guidance on inflation and policy benefits explains why regular reviews matter. Education and living costs will not necessarily rise at the same rate.
When a lump sum is intended to provide years of income, allow for investment and advice fees and test less favourable return assumptions. Review after a new child, marriage, divorce, significant debt change or job move.
Quick answers
Is R1 million enough?
It might be for one household and inadequate for another. Compare it with actual obligations and available resources rather than the size of the number.
Does a stay-at-home parent need life cover?
Possibly. Replacing unpaid childcare and household work can cost money even when no salary is lost.
Does life cover protect my salary if I become ill?
Ordinary death cover does not do that. Income protection, disability and severe-illness benefits address different risks and need a separate assessment.
Start with your household, not a headline figure
Explore Proserve’s life and personal protection options, then request a life-cover review. Bring your budget, debts, savings and policy schedules so the discussion starts with your circumstances.
