I have seen post that says that when we buy insurance, we should have 10x of annual income in the event of death and 5x in terms of critical illness. Can i know what does this mean?

These are just general rule of the thumbs. Because it covered the following:

(1) Cost of 10X annual income is for death and 5X to premiums is affordable enough.

(2) Coverage should be sufficient for a family to make changes and accomodate (either lower expenses or change in lifestyle which should hopefully help).

(3) some form of coverage helps to manage cost expectations (combination of the 2 reasons above).

Of course, a more detailed coverage plugging all the liabilities would be much better, but that takes a lot more work.

Hi Anon,

This is a guideline of how much we should be insured, of course as mentioned this is a guideline and not the only way to calculate how much coverage you need.

If you have kids and other dependents, then you might need to factor in other potential expenses, like education fees and also other living expenses that might add up to more than just 5 - 10x your annual income that you might need.

But that can only happen when you have spoken to a consultant who can do a better analysis of your needs so that you can get the best advice for your situation