The mortgage is only one line
A death benefit can help survivors through a financial transition. Mortgage debt can be a starting point, but it does not show how much income would disappear or how expenses would change. Prepare an after-death household budget: confirmed income, essentials, childcare, instalments and one-off costs. Verify survivor benefits with the relevant institutions. A projection, benefit for another risk or savings that are difficult to access should not be treated as a certain payment.
An example with an explicit term
Suppose a household has a CHF 1,800 monthly shortfall after confirmed income and benefits for four years, plus CHF 8,000 of one-off expenses. With no return or inflation, the illustrative gross need is CHF 94,400. If CHF 20,000 is actually earmarked for this purpose, the residual gap is CHF 74,400. The calculation does not set a sum to insure; it helps compare terms and avoid counting the same reserve twice.
Fixed term or declining need
Costs linked to study or childcare may fall over time. A lasting loss of income may remain significant after the initial period. Compare the timing of the need with the policy term and, if the benefit declines, check the precise schedule. Ask who receives the payment, in which circumstances, and check exclusions and acceptance requirements. Death cover does not replace income protection for incapacity.
Review the file when costs change
Distinguish money intended for the family from any security assigned to a lender. Do not assume the same payment fully funds both. Keep the calculation and beneficiary clause accessible to authorised people. Revisit assumptions after a move, income change or family event. Insurers’ examples illustrate what death cover can do; the signed terms establish the amount and term.
Put a price on unpaid work the household would have to replace
A person can contribute childcare, school runs and household work without drawing a salary. If that person died, the survivor might have to pay for childcare or reduce their own working hours. Build a separate budget for the death of each adult. Both may need cover, but the size and duration of the need can differ even when one person earns most of the cash income.
Check who would actually receive the payment
Ask for the exact beneficiary wording and how to update it. Compare the named recipient with the person who would have to meet the costs in your calculation. If the family situation is complex, have the legal effect of the clause checked before relying on the payout in your plan. A benefit figure is only useful for this exercise if it would be available to the person whose budget needs it.