Multiple

The multiple approach relies upon actuarial data supplied by RiceWarner.

Insurance needs vary due to many factors such as income, age, family and working status and the number and age of any children. Rice Warner has reviewed needs for several cohorts of the population separately and combined. As expected, families without children have significantly lower need for insurance cover for death. Income Protection (IP) insurance requirements are usually around 85% of income, regardless of family status.

The below table demonstrates the amount required when a person with a family dies or becomes totally and permanently disabled. The need on death has been considered on two bases, basic life cover to meet minimum needs and life cover to replace future income. The table expresses the insurance needs as a multiple of years of family income. An adviser is able to specify which multiple method they wish to use within the insurance needs template:

For example, a 20 year old with a gross salary of $100,000, would have a lookup factor of 9.3 for Basic Life Cover. Therefore, the required life cover would be $100,000 * 9.3 = $930,000 utilising this method.