Choosing cover using an arbitrary income multiple.
Skip to content
01
02
03
04
05
06
07
08
Protection Gaps
Income Multiples
Employer Cover
Behavioural Finance
Advisory — Protect — Term Insurance
Term Insurance
Protect the financial life your family would otherwise have to rebuild without you.
Term insurance exists to protect your income, your dependants, your liabilities and the financial commitments you're already carrying — not simply to hold a policy. The objective is to understand what level and duration of cover actually fits your circumstances, then check it against what you already have.
Life Protection Assessment
How much life cover does your family actually need?
Answer a few questions to estimate an indicative protection requirement and compare it with the cover you already have. This is an educational estimate, not a quote, underwriting decision or personalised financial recommendation.
Illustrative prototype — methodology pending review
Architecture
How term insurance fits into your protection structure
Your Dedicated Protection
Term Insurance
A defined sum assured for a defined period — the primary layer built specifically to protect your dependants, without a savings or investment component.
Additional / Existing Protection
Employer Life Cover
Useful additional protection, but typically linked to employment and subject to change — worth treating as one layer rather than the whole structure.
Existing Financial Assets
Resources that may form part of your family's financial resilience, subject to suitability — not a substitute for dedicated protection.
Other Protection / Existing Policies
Any other existing arrangements worth assessing before adding new cover, so protection isn't duplicated or left with gaps.
Investments and savings can support a family, but they don't automatically replace dedicated life protection — each source plays a different role, and it's worth understanding how they work together rather than assuming one substitutes for another.
What to Check Before Choosing
The premium is only one part of the decision.
Ten policy characteristics worth understanding before comparing premiums. Select each to see why it matters.
01 Sum Assured
Whether the amount actually addresses your family's financial protection requirement — income replacement, liabilities and future obligations together, not a round number.
02 Policy Term
Whether the duration matches the period during which dependants and major obligations actually exist, rather than an arbitrary round figure.
03 Premium Structure
How premiums are structured over the policy term, and what the long-term commitment actually looks like.
04 Claim / Policy Terms
The contractual terms and claim-related requirements your family would need to navigate at the time it matters most.
05 Exclusions
What the policy does not cover, regardless of the sum assured.
06 Riders
Whether any additional benefits are actually relevant to your circumstances, rather than added automatically.
07 Insurer / Service
The insurer's overall service quality and claims-handling framework, not just its brand recognition.
08 Nomination / Beneficiary Structure
Ensuring the policy's ownership and nomination arrangements are correctly understood and kept up to date.
09 Portability / Continuity
How the policy continues through changes in employment, income or personal circumstances over its term.
10 Policy Fit
The cheapest policy is not automatically the most appropriate one — fit with your circumstances matters more than price alone.
SA Hedge Fund Term Protection Framework
We don't start with a premium or an arbitrary income multiple.
We start with the financial consequences the protection needs to address — in this order.
01
Income Replacement
02
Dependants
03
Liabilities
04
Future Obligations
05
Existing Protection
06
Financial Resources
07
Policy Suitability
We don't start with the cheapest policy. We start with the financial consequences it needs to address.
Common Mistakes
Mistakes that can quietly create a protection gap.
The mistakes are usually not obvious when you buy the policy.
Ignoring outstanding liabilities like a home loan.
Ignoring future family obligations such as education.
Relying entirely on employer-provided cover.
Choosing a policy term that doesn't match your obligations.
Choosing a policy purely on premium.
Adding riders without evaluating their relevance.
Not reviewing protection after a major life change.
Our Advisory Approach
A decision journey, not a sales process.
1
Understand
Understand income, dependants, liabilities, assets and existing protection.
2
Assess
Identify the potential protection requirement and existing gap.
3
Recommend
Evaluate appropriate protection structures for the circumstances.
4
Implement
Support the practical process of arranging appropriate cover.
5
Review
Review protection as financial circumstances change.
Life protection should evolve as financial responsibilities evolve.
Cover that was right at one stage can quietly fall out of step with your circumstances. These are the moments worth prompting a review.
Marriage
Birth of a child
Increase in income
Home loan or major liability
New dependant
Change in employment
Significant change in assets
Business ownership
Change in retirement timeline
Policy nearing end of protection period
Why SA Hedge Fund
Protection planning, not product pushing.
Our role is to help you understand how much protection may be appropriate, what it needs to achieve, how your existing cover fits, where potential gaps exist, and what policy characteristics matter — then structure protection appropriately within your broader financial plan.
That means the conversation starts with your circumstances, not with a particular policy.
What guides the process
Clarity
Structure
Suitability
Implementation
Not product-first. Circumstance-first.
Frequently Asked Questions
Common questions about term insurance.
How much term insurance do I need?
It depends on your income, dependants, outstanding liabilities, future family obligations, and what protection and resources you already have. The assessment above gives an indicative range based on those factors — it's educational, not a quote or underwriting decision.
How long should my term insurance policy last?
Typically for as long as dependants and major financial obligations exist — often until retirement or until liabilities such as a home loan are expected to be cleared, whichever runs longer.
Should employer life insurance count toward my protection?
It can be counted as one layer, but it's typically linked to employment and may not continue if you change jobs — worth treating as additional protection rather than the whole structure.
Should existing investments reduce my required life cover?
Financial assets genuinely earmarked for your family's future can reasonably offset part of the requirement, but this depends on suitability and shouldn't be assumed automatically for assets held for other goals.
Is term insurance different from life insurance?
Term insurance is a type of life insurance that provides a defined sum assured for a defined period, without a savings or investment component — which is generally what makes it a cost-effective way to buy pure protection.
Should I buy term insurance based on an income multiple?
An income multiple alone can be a rough starting point, but it typically ignores liabilities, future obligations and existing protection — factors that a more complete assessment should take into account.
What happens if my income increases after buying a policy?
Your protection requirement can increase too. It's worth reviewing cover after a significant income change rather than assuming the original sum assured remains adequate.
Do I need riders?
Riders can be useful, but each one should be evaluated for relevance to your circumstances rather than added by default — more riders isn't automatically better protection.
Should I review my term insurance after marriage or having children?
Yes. Both events typically change the number of dependants and the financial responsibilities your protection needs to cover.
Can I have multiple term insurance policies?
Yes, multiple policies can be held together, and doing so can also be a way to build cover incrementally as circumstances change.
How should I think about liabilities when calculating life cover?
Outstanding liabilities such as a home loan are generally worth adding on top of income-replacement needs, since dependants would otherwise need to service or settle them.
What should I compare when evaluating term insurance policies?
Beyond premium, it's worth comparing sum assured adequacy, policy term, claim settlement track record, exclusions, and whether any riders are actually relevant to your situation.
Related Research
Evidence behind the guidance.
The pieces below are in progress and not yet published — shown here to indicate the kind of research that will support this page.
How Much Life Insurance Does a Family Actually Need?
Why holding a policy doesn't automatically mean holding enough of one.
Coming SoonWhy Income Multiples Can Mislead Protection Planning
What a simple multiple of income leaves out — and why it matters.
Coming SoonEmployer Life Cover vs. Independent Protection
Why cover linked to your job may not be the protection your family can count on.
Coming SoonBehavioural Biases in Life-Protection Decisions
The behavioural biases that lead people to under-insure, and how a structured process offsets them.
Coming SoonKnow Your Protection Before Your Family Needs It.
A structured review can help you understand whether your existing life protection is appropriate for your family's financial responsibilities and long-term plan.