How to know if you're over-insured or under-insured
TL;DR: Under-insurance leaves your dependents exposed if something happens to you; over-insurance means you're paying premiums for cover you don't need instead of investing that money. The right cover amount is based on your actual income replacement need and existing dependents — not a flat multiple pulled from an ad.
Signs you might be under-insured
- Your life cover wouldn't replace more than a couple of years of income for your dependents
- You have no health cover beyond what an employer provides (which typically ends if you change jobs)
- You've added a dependent (child, aging parent) since you last reviewed your cover
Signs you might be over-insured
- You're paying for cover far beyond what your dependents would actually need to replace your income
- You hold multiple overlapping policies bought at different times without ever consolidating
- A large share of an "investment-cum-insurance" product's premium is actually going to insurance charges rather than growth
Get a specific number, not a guess
Our Build My Financial Plan report calculates life and health insurance cover recommendations sized specifically to your dependents and income — alongside your full goal and debt plan.
Frequently asked questions
Should insurance and investment be combined in one product?
Generally, keeping them separate (term insurance for pure protection, dedicated investments for growth) gives clearer visibility into what you're paying for each — combined products often bury the actual insurance cost inside the returns shown.
How often should I review my insurance cover?
At minimum after any major life change — a new dependent, a home loan, a significant income change — and otherwise roughly every few years, since needs shift even without an obvious trigger.