I come across a few articles saying that you need to have insurance coverage of at least 10x of your annual income. Initially I thought I was confused because I also read it somewhere that one need at least 10x of income for retirement funding. But today I come across this 10x insurance coverage thing again in an article. After looking at the article I think I know what's going on:

Firstly, it is nonsense to give a general figure as to the amount of of coverage required. Common sense tells us that a person who has no dependent require less coverage then another person who has dependents. Also a young parents with very young children need more coverage then a retiree whose children have grown up and working. So from this simple reasoning, the 10x rule fail miserably. So what is this 10x thing about if it is a nonsense? It is call marketting tactic. They just keep on saying that 10x coverage is required and if repeated enough time, the agent will have an easlier time of selling a product. The agent also don't need to any needs-analysis since this 10x coverage is prescribed by their company. Vested interest you see.

Secondly, I noticed that there will be followed by a "solution" propose to solve to this lack of 10x coverage. It will be a proposal to buy a term insurance because it is "cheap". I noticed that many insurance companies seem to be using this 10x problem to sell term. But what happen to other class of insurance that is also needed? Term insurance will only work if the person dies or have Total and Permanet Disability (TPD). A critical illness rider can be attached to it as well but at a much higher cost. But all advisers know that term insurance has been coming down recently because of the low claim experience. While term insurance has its place, these insurance companies keep quiet about other class of insurance - which is disability income. This is the second most important insurance besides a hospital plan. But why there is silent about this kind of insurance? One reason is because there are only two insurers selling disability income as a personal plan. So the remaining companies cannot talk about it since they can't sell. Another reason is because many advisers are just salesperson who only can close a simple transaction. Disability income required a technically competent person to explain. Most of the cases required medical checkup. The additional work to arrange for medical, inconvenience to clients and a high chance of being loaded or rejected make it a non-viable business for the advisers to sell. So they keep quite about it. Vested interested you see.  

There are so many vested interest in the industry that I feel sad for ordinary consumers.