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.)

Also, while policies have a 120 days exclusion period, look out for those where there is only a 60 day exclusion period for new or remortgage borrowers, and no exclusion period for those homeowners who are transferring from existing policies.

A good policy will also allow you to purchase up to 25% additional cover for household or other expenses for when you need money most.

Most homeowners can take out MPPI – it is available to both new and existing mortgage borrowers aged between 18 and 65. With a good policy, there will be no restrictions of occupation, employment status – including self-employed and contract workers – or people who work either on a full or part time basis, provided they have worked for a minimum of 16 hours per week over past six months. Again, applications should not be discriminated against on grounds of gender and sexuality.

In a nutshell, mortgage borrowers should not feel obliged to take out their lender’s mortgage protection cover. By spending just a little time shopping around for best deal from a reputable provider, you can make significant savings.

* Research from Burgesses Ltd. compared MPPI policies from top ten UK lenders and found average monthly repayment on a £100,000 mortgage to be £604, and average MPPI rate to be £5.78 per £100 of monthly cover.

Over 25 years this represents a total MPPI cost of £10,473 (£604 x 12 x 25 x 5.78% = £10,473). This compares with a rate from Burgesses of only £4.00 per £100, or a total cost of £7,157 (£604 x 12 x 25 x 4.00% = £7248) representing a total cost saving of £3225 or £129 annually. Applied to 2.2m UK MPPI policies, savings figure comes to £7.095 billion