Along with the type of policy, you need to consider how much coverage you need. Some experts suggest that your death benefit be at least six to eight times your annual salary. So, if you earn R500,000 per year, you should have a life insurance policy worth at least R3,000,000.
While this sounds multiple of annual salary sounds good in theory, it can be difficult to stick with this formula. Do you really need this much coverage? Do you need more than this? Does it fit in with your budget?
Nobody really knows for sure how much life insurance coverage they need. While you can use a standard multiplier as a starting point, you should discuss this with your family and financial advisor to determine the proper amount. This aspect can vary a lot based on the person’s unique situation.