Or, for a more generalised guide then, consider insuring your life for between 5 and 10 times your current net salary after tax.

If you are using life insurance to cover repayment of a mortgage, initial sum insured must equal value currently outstanding on your mortgage.

The Policy Term Once you have decided on value of cover you need, next step is to decide how long you wish to be covered by insurance.

In other circumstances, Term is a personal decision but your age should be an important influence. You should note that minimum Term is usually 5 years and most people select a Term between 10 and 25 years.

Do you want sum insured to be increased automatically in line with inflation ie an "indexed" policy? Indexation is an optional extra and your monthly premiums will increase each year in line with adjustment made by your Insurance Company.

Life policies that provide an increasing sum insured are called 'Increasing Term Insurance'; policies that provide a constant sum insured are known as 'Level Term Insurance'.

Finally, you should always read Key Features Document for a Life Insurance policy to ensure you understand exactly what you will be insured for and any restrictions that may apply. (eg a common restriction is death caused by being involved in a hazardous pursuit.)