How to use it

1. Enter the loan amount, tenure and rate for the home loan.
2. Enter the single premium quoted for reducing cover, and whether you would pay it in cash or finance it into the loan.
3. Enter the level-cover quote: sum covered, monthly premium and how many years you would pay it for.
4. Add the illustrated cash or maturity value only if your contract states one. Leave it at 0 for the conservative view.

The coverage gap is the point people miss

Comparing total premiums alone makes reducing cover look like the obvious answer, and that comparison is incomplete. The two products are not buying the same thing. Reducing cover is sized to the debt, so at the end of the term it is worth close to nothing, by design. Level cover holds its sum covered throughout, so as the loan falls the difference between them grows — and that difference is what reaches your family rather than the bank.

The calculator shows that gap explicitly. If nobody depends on your income beyond the mortgage, the gap may be worth nothing to you and the cheaper product wins. If someone does, you are comparing a debt settlement against a debt settlement plus a legacy, and the price difference starts to look like a price for something.

A note on cash value

Level-cover illustrations often show a cash or maturity value that makes the net cost look far lower. Treat those figures as projections unless the contract guarantees them. A comparison that depends on a non-guaranteed number is a comparison of one certain cost against one hopeful one, so run it both ways before deciding.