Marcus D'Cruz, 34, is an engineer earning $9,200 a month and the only earner in a family of four, and he turns 35 next month. His wife Andrea looks after their two children, aged three and six. The household spends $5,931 a month, owes $300,000 on its flat and holds $150,000 in cash and investments. After the birth of their second child, Marcus asks how much life cover the family would need if he died.
Life insurance pays a sum when the insured person dies or becomes totally and permanently disabled. That sum keeps paying for the people who relied on the insured person's income until the household's own savings can do it. Every year the household saves, its assets grow and the years left to fund get shorter, so the cover it needs falls.
For Marcus, the need is about $1.57 million at 35 and reaches zero at 50. The sections below follow how he works out the sum, how it falls each year, and what term cover costs him.
How Is His Life Cover Need Worked Out?
The need is four figures added and subtracted:
- Spending until the household funds itself. Annual household spending multiplied by the years until savings can pay for the household alone.
- Outstanding debts. A mortgage or car loan that would fall due.
- Assets the household can reach. Cash and investments, less money locked away for healthcare.
- Existing cover. Death benefits from policies the household already holds.
The life cover need is spending × years to self-funding + debts, less reachable assets and existing cover. A result below zero is read as zero. Marcus holds no life policy today, so his existing cover is zero.
According to the Department of Statistics (SingStat), resident households spent an average of $5,931 a month in the Household Expenditure Survey 2023 (checked 30 September 2026). Marcus's household spends the same amount, or $71,172 a year.
What Does Marcus Need At 35?
Marcus plans to stop working at 55, so from his 35th birthday next month the household has 20 years to fund. The example starts at that birthday. After employee CPF of 20% on the $8,000 wage ceiling, he takes home $7,600 a month, or $91,200 a year. The household spends $71,172 of it and saves $20,000 a year, and the example assumes a return of 4% a year. The mortgage is held at $300,000 for simplicity.
At 35 the need is $71,172 × 20 + $300,000 = $1,723,440 of spending and debt, less $150,000 of assets, which leaves $1,573,440.
| Age | Reachable Assets (Estimated) | Spending Still To Fund | Debts | Life Cover Need |
|---|---|---|---|---|
| 35 | $150,000 | $1,423,440 | $300,000 | $1,573,440 |
| 40 | $290,824 | $1,067,580 | $300,000 | $1,076,756 |
| 45 | $462,159 | $711,720 | $300,000 | $549,561 |
| 48 | $582,298 | $498,204 | $300,000 | $215,906 |
| 50 | $670,613 | $355,860 | $300,000 | $0 |
| 55 | $924,230 | $0 | $300,000 | $0 |
Source: SingStat Household Expenditure Survey 2023; assets estimated at 4% a year with $20,000 saved each year
Why Does His Need Fall Every Year?
The need is measured against the date the household's savings can pay for it without a salary. For a household saving towards financial independence, that date is its stopping age.
Two things change each year. One year of spending drops off the sum, and one more year of saving and investment return is added to assets. A fixed multiple of income, a common rule of thumb, ignores both, and gives the same answer at 35 and at 50.
Marcus's need reaches zero at 50, five years before his stopping age. At 50, assets of $670,613 exceed the $655,860 of remaining spending and debt. A household that saves less, or spends more, reaches zero later.
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Why Is MediSave Left Out Of His Assets?
MediSave pays for healthcare and approved insurance premiums. It cannot be withdrawn to pay the household's rent or groceries, so the method leaves it out of the assets that offset the life cover need.
CPF savings that the household cannot yet withdraw are left out as well. Marcus's family would fund the years before 55 from savings outside CPF, and his cover need reflects that.
What Would The Cover Cost Him?
Premiums below come from compareFIRST, the life insurance comparison portal run by the Life Insurance Association Singapore (LIA). They were quoted on 13 September 2026 for a male non-smoker aged 35 next birthday, which is Marcus's age. The table gives the lowest, median and highest annual premium among the term plans quoted at each sum and premium term, and does not rank plans.
| Sum Assured | Premium Term | Term Plans Quoted | Lowest | Median | Highest |
|---|---|---|---|---|---|
| $500,000 | 11 to 15 years | 26 | $221 | $311 | $2,660 |
| $1,000,000 | 11 to 15 years | 20 | $350 | $485 | $792 |
| $1,000,000 | 21 to 25 years | 20 | $472 | $651 | $903 |
Source: LIA compareFIRST, premiums quoted 13 September 2026
Cover for 11 to 15 years costs less than cover for 21 to 25 years at the same sum. Marcus's need is gone by 50, so a 15-year term bought now, ending the month before he turns 50, covers almost every year in which the need is above zero.
A policy that ends while the need is still above zero leaves those years uncovered. A policy that runs past the date the need reaches zero keeps charging premiums for cover the household no longer needs.
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What Changes The Answer?
Four inputs move the need most:
- Spending. Each $1,000 a year of spending adds $1,000 for every year left to fund, or $20,000 for Marcus at 35.
- The stopping age. A later stopping age adds years of spending to the sum.
- Debts. A mortgage paid down faster lowers the need by the same amount.
- Dependants. When no one depends on the insured person's income, the spending term drops out.
A colleague of Marcus's shows the last case. She is single with no dependants, owes $200,000 on her flat and holds $250,000 in savings. Her assets exceed her debts, so her need is zero.
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How Much Cover Did Marcus Buy?
Marcus buys two term plans for 15 years, so both end the month before he turns 50, when his need is close to zero: $1,000,000 at a median premium of $485 a year and $500,000 at a median of $311. The $1,500,000 of cover costs about $485 + $311 = $796 a year. It falls $73,440 short of his need at 35, and his need drops to about $1,476,000 at 36, below the cover.
The method suits households with a savings plan and a date by which their savings can pay for them, such as single-income families like the D'Cruzes. A household with no savings plan, or with dependants who will rely on it for life, has a need that does not fall in the same way, and its figure depends on its own spending, debts and plans.