LifePolicyFactsHow it works
It divides the monthly premium by your take-home pay and also shows the yearly and daily cost, so the price feels concrete.
Example
A 45 premium on 4,000 of monthly take-home pay is about 1.1% of income, 540 a year or roughly 1.48 a day.
If the share feels high, compare a shorter term or a smaller amount before dropping cover altogether.
Frequently asked questions
Is there a right percentage?
No fixed rule exists. It depends on your other commitments, so use it as a comfort check.
Should I use gross pay?
Use take-home pay, since that is what the premium is paid from.
FA
Written and reviewed by Fawad Alam, Founder and Editor. Last updated October 2026. How we write.