Why Coverage Needs to Be Calculated: It Covers a Responsibility
The death benefit is not a number you pick from thin air. It corresponds to the financial obligations that would need to be filled if the main earner died. List those obligations one by one and the coverage amount gains a solid basis. Three responsibilities dominate: first, the remaining balance on debts such as a mortgage or car loan, which you want paid off so the family is not burdened with repayments; second, future education costs for children, from kindergarten through university — a definite long-term expense; third, several years of household living expenses and support for aging parents, replacing the income the deceased would have continued to provide. As an example, imagine a family with 1.5 million yuan of mortgage outstanding, 600,000 yuan of estimated education costs until both children graduate, and 120,000 yuan of annual living expenses to cover for 10 years. The rough shortfall is 1,500,000 + 600,000 + 120,000×10 = 3.3 million yuan. Once the math is done, you are not picking a "feels about right" number — you have a coverage target with a clear calculation behind it.Two Core Methods: Income Replacement and Debt Coverage
The two most common approaches can cross-check each other. The first is income replacement: coverage ≈ annual household income × number of years to cover, plus a child education fund. If the main earner brings in 200,000 yuan a year and you want 10 years of income protection, coverage is about 200,000×10 = 2 million yuan; add 600,000 yuan for education and the total is about 2.6 million. This method is intuitive — it turns "how many years of buffer do we need" into a concrete number. The second is debt coverage: coverage = all outstanding debt + child education costs + several years of family living expenses. Its core idea is that a family should not see its debts collapse the household because of one death, so rigid obligations like the mortgage come first. The two methods usually produce similar numbers; take the higher as your reference. After estimating, confirm the remaining loan balance with a [mortgage calculator](https://calc20.top/en/mortgage) and model future education funding needs with a [compound interest calculator](https://calc20.top/en/compound-interest), so every obligation has a concrete figure behind it.How Much to Budget: Premium Limits and Product Choice
Once the coverage amount is set, the next question is the premium budget. A common reference is the "double-ten rule": keep premiums within 10% of annual household income and aim for coverage of about 10 times annual income. For a household earning 200,000 yuan a year, the premium budget is roughly 20,000 yuan and the target coverage about 2 million yuan. This is only a framework — adjust for debts, age, health and existing protection. On product choice, term life insurance is usually the best value: coverage lasts a fixed period (for example until age 60 or until the mortgage is paid off), and premiums are far lower than whole life. It suits breadwinners with a mortgage and children. Whole life costs much more and is used mainly for wealth transfer or asset allocation. Budget your premiums sensibly — use a [salary calculator](https://calc20.top/en/salary) to see the premium-to-income ratio clearly so protection costs do not crowd out normal living expenses. Life insurance is one layer of the family's financial safety net; read it together with savings, emergency funds and retirement planning to form a complete financial map.FAQ
Q1: What is the difference between life insurance and critical illness insurance? Can they replace each other?
No. Life insurance pays out on death or total disability, answering "what happens to the family if I am gone". Critical illness insurance pays a lump sum on diagnosis of a covered condition, covering treatment costs and lost income during illness. They cover different risks and are usually bought together; if the budget is tight, prioritize adequate term life coverage for the breadwinner.
Q2: I already have accident insurance. Do I still need life insurance?
Yes. Accident insurance only pays for death and disability caused by accidents. Death from illness — heart attack, cancer — is not covered, yet illness is the leading cause of death. Life insurance covers both accidental and natural death, so it is broader; accident insurance supplements it rather than replacing it.
Q3: Until what age should term life coverage run?
Typically until the family's major responsibilities are complete — the mortgage paid off and children through university. A common choice is to age 60 or 65, because by then most debts are cleared and children are independent, so the death of the breadwinner has a much smaller impact on family finances.
Q4: Can I buy life insurance with a pre-existing health condition?
It depends. Life insurance underwriting is more lenient than critical illness insurance. Mild conditions such as slightly high blood pressure or thyroid nodules usually qualify at standard rates or with a small loading; more serious conditions may face exclusions or rejection. Always disclose honestly, and since underwriting standards vary by company, you can apply to several and keep the best result.