So called experts say the number of people without Life Insurance is far too high in NZ and as a nation was are under-insured in this area. But in reality there are large chunks of the population who simply do not require life insurance anyway.
Children obviously, those younger adults without debt and / or dependants and at the other end of the scale, the much older people without debt or where their sons or daughters no longer need your financial assistance to survive after you you have passed. So, that is a fair chunk of the population anyway.
So, those with debt (we really mean a mortgage) or with dependants who would be seriously financially disadvantaged if you were no longer around make up the majority of people who need life insurance.
To us, the number one rule about how much life insurance you have is based on affordability. Sure, in a perfect world you might need, say $500000, but if that is a financial strain now then it is better to just take what you can commit to. Otherwise you will simply cancel it down the track anyway and have nothing. So, take what you can afford.
But, assuming you can afford the premiums try to get enough cover to clear your mortgage in full and then add an amount you feel would adequately financially assist your spouse or dependants for the foreseeable future following your passing. Ideally at least enough to provide a source of replacement income for 2-3 years to allow life to go on over that time.
If you have three children under 5 and a big mortgage then a significant size life insurance would be sensible but if your mortgage is now small and your kids are finishing high school then a whole different, potentially lower, amount of cover may be all that is needed.
Life cover can always be reduced too later, so as changes in your life occur your life insurance amount can be altered too to suit.