Life Insurance

Need depends on financial dependants, debts and the income your family would retain. With no dependants or debts, need may be lower. Age and health affect entry terms, but buying early does not guarantee a fixed premium.

There is no single formula, but a common Israeli approach is to take annual income times five to ten years, add the outstanding mortgage and other loans, and subtract existing pension savings and provident-fund balances. For families with young children the upper end of the range is usually recommended, so the coverage can support the family until the children become independent. The number that comes out is a starting point and should be adjusted for lifestyle, debts, and existing life coverage inside the pension and disability layers.

Mortgage life insurance is a policy the bank requires as a condition for granting the mortgage. The sum insured decreases over time in line with the outstanding loan balance, so if the insured passes away during the term, the policy settles the remaining mortgage. Regular life insurance (risk policy) is a standalone policy that pays a fixed sum to the beneficiaries chosen by the insured, and is not tied to the bank or the loan. In most cases it makes sense to have both — one that clears the mortgage and an additional layer that leaves the family with additional money for ongoing living expenses.

A single person supporting parents or other dependants may need cover. Without dependants, need may be lower. Check the premium schedule and terms for increasing cover; a future increase may require medical underwriting and is not guaranteed.

It is worth updating the policy after life events such as marriage, childbirth, divorce, buying a home, taking a mortgage or a large loan, moving into self-employment, a significant change in income, or a new medical diagnosis. A review every one to two years also helps check whether the sum insured still matches reality, whether the premium is competitive, and whether there is duplicate life coverage in the pension fund or managers' insurance. Every meaningful update is also a chance to verify that the policy beneficiaries reflect the insured's current wishes.