How much should you spend monthly on insurance based on your income?

I spend based on my needed coverage. Since I'm still young, I'm still spending less than 10% of my income on insurance.

Rather than as a percentage of income, it's more sensible to look at the coverage needed because sometimes, insurance policies that cover $2x can cost less than 2 times the cost of an insurance policy that covers $x.

Hi anon,

I have a 40-30-20-10 guideline which goes as follows:

40% Expenses (maximum)

30% Mortgage/Rent (maximum)

20% Savings/Investments (minimum)

10% Insurance (maximum).

Thus, protecting yourself should generally not exceed 10% of your income unless 1) You are subjected to loading or 2) you are a sole breadwinner and need to cover multiple family members.

Plans such as retirement income plans would fall under the category of savings/investments. If you have no mortgage to pay, then you may redirect that 30% towards investments.

Ultimately it is still a guideline so the exact percentage will depend on your circumstances.