When it comes to determining the best life insurance plan to choose, the first step is calculating how much you can afford to spend. Life cover payments vary according to your specific requirements as well as the insurer's terms. While it essential to ensure that you have sufficient cover to provide your loved ones with a good level of financial support, you should not have to break the bank trying to afford payments that are not within your budget.

To help you determine how much you can afford to spend on life insurance, this handy checklist will help you work out your needs and requirements.

• Your family's basic needs – the first thing to consider is your loved ones' needs. If you are paying off various debts and are supporting children and a spouse, you should include this in your breakdown of costs and requirements. If you are the sole breadwinner and your partner does not work, you will also need to ensure that you are able to provide enough for your family to live comfortably.  Remember to include debts, monthly bills as well as living costs into this estimate.

• Your mortgage - your policy's cover should be high enough to cover your mortgage. If the cover is not sufficient, this means that your loved ones will have to deal with mortgage payments once you are no longer around, which may result in them having to sell your house. Including the mortgage amount will mean the home will be paid off when you die. Always calculate your current mortgage debt when considering life insurance quotes.

• Your children's education costs – aside from the grief of losing a parent, another pitfall of one parent passing away is lack of financial support for education – especially college and university.  If you want to make sure that you leave enough to help your children or even grandchildren pay for college, include these costs in your life insurance policy. When calculating the education needs of children and grandchildren, you can also include room and board expenses, as well as books and supplies along with fees.

• Your funeral expenses – few like to think about these things, but if you are no longer around, it is your loved ones who will have to arrange and pay for your funeral. Including extra for your funeral arrangements, or choosing a life cover plan that includes insurance cover is the best way to ensure that your family can manage the often high costs of a funeral.  

• Your charities - if you would like to leave money to a particular charity when you die, you can name this charity as your beneficiary. You will be able to regular premium payments and when you pass away, the charity will receive your death benefit. If you don't want to give your benefit to the charity, you can also arrange to donate a portion of your benefit instead. In this way, your life insurance can not only help your loved ones, but also the charities that you have always supported during your life.