Life Insurance Self-Assessment Calculator

Use our life insurance coverage calculator to get a clear idea of how much cover you may require

Step by step guide to using the calculator

The calculator above lets you enter details about your current and future cover requirements to help you determine an adequate level of cover.

Step 1 - Determine how long you require cover for

  • Enter the number of years that you wish to take out cover for

Generally, as you become more financially secure the level of insurance required declines over time while the cost of your insurance cover tends to increase over time. Think carefully about why you need insurance and when that need will end.

Step 2 - Add up your current debts

  • The sum existing on your mortgage

One of the biggest financial commitments (debts) for most Australians is their mortgage. Life Insurance can be used to discharge the mortgage in the event of your death or injury and if that’s one of the reasons why you’re  assessing your insurance needs then you should add your outstanding mortgage balance here.

  • Other existing loans

Life Insurance can be used to pay out your personal debts in the event of your death or injury and if that’s one of the reasons why you’re assessing your insurance needs then you should add your outstanding debts here

  • Funeral expenses (optional)

Think about the type of funeral you would like to have an adequate sum to put away for this. Learn more about how much funerals cost in Australia

Step 3 - Add up your living expenses

  • Monthly ongoing living expenses (general household bills)

Apart from your mortgage (and any school or university fees) what do you spend each month to maintain your lifestyle? Review your budget to understand how much monthly income you and your family actually need to pay their bills and maintain your household.

Step 4 - Determine what you would have to pay in school fees

  • Add together number of dependents and remaining years at school

Dependents includes your children or anyone who is financially dependent on you and the income you earn. It’s generally refers to minors and to those who are currently unable to support themselves financially. Think about how long they have remaining at school and annual tuition fees

Step 5 - Add up your current assets and offsets that could be used in the event of your death

  • Current Savings/Term Deposits

This includes cash (in any form), foreign currency (in Australian dollars), and any assets held in a bank account or equivalent.

  • Shares

Shares will fluctuate in value over time and produce variable levels of income and growth. For the purpose of this calculator use an approximate value based on current data but remember to exclude shares in private companies and suspended or highly illiquid stocks – after all, if the shares can’t easily be sold then they should be excluded from consideration.

  • Other assets that could be sold off

If you have other assets that could be sold to discharge your debts or support your family then they should be recorded here. This may include your investment property, your art collection, and your boat or holiday home. It’s best to be conservative when valuing these types of assets.

Step 6 - Determine how much cover you have in your superannuation

  • The balance of your superannuation

Most working Australians are members of one or more superannuation funds that will provide a benefit to them (or their estate) in the event of the death or retirement of the member.  Think about all your superannuation accounts and insert the total balance here

  • Existing cover you already have

Most working Australians are members of one or more superannuation funds that will provide a benefit to them (or their estate) in the event of the death or retirement of the member.  Most Funds also provide a level of life insurance cover to their members. Think about all your superannuation accounts and insert the total insurance cover they provide here

  • Apply an appropriate inflation rate

Over time, inflation reduces the purchasing power of your money. This sound complicated but it simply means that when inflation is high things cost more. In periods of low inflation, your money buys more. Inflation will change over time but the figure you include here will help you manage this risk.

Find out more about life insurance through superannuation

Still not quite sure what may need to be covered? Use a needs approach...

Make sure your life insurance is can cover the following needs:

Immediate needs in the event of death

  • funeral expenses
  • emergency fund for unexpected costs: to cover any medical costs for any hospital needs upon illness or injury
  • outstanding taxes
  • outstanding debts: credit cards, personal loans, etc
  • estate settlement costs
  • legal costs
  • your children's education expenses.

Ongoing income needs to meet day-to-day expenses:

  • food
  • clothing
  • shelter: utility bills, maintenance costs
  • transportation
  • insurance: health, car, home and contents insurance.

Your families specific circumstances

    • your partner's age
    • the number of children that you have and their age
    • whether or not your partner is working and his/her capacity to earn an income
  • your outstanding debt (including your mortgage)
  • whether or not you will be providing funds for your surviving partner's retirement
  • the number of years you are willing to fund your family's ongoing needs

Special funding needs

  • University funding
  • Charitable donations
  • Buy/sell agreement funding
  • Business succession planning

What other factors will influence how much cover I take out?

Some of the main factors that will influence the amount of cover you take out include:

FactorHow it will influence how much I take out?
The total cost of a policyThe more cover you take out, the greather the total cost of a policy. If the total cost is too expensive, it may limit the amount of cover you take out.
Your ageIf you take out life cover at a younger age you'll able to take out a larger amount of cover.
The type of coverIf you package your life insurance with trauma, you may take out a grater sum.

Find out if you already have life cover in your super

A death benefit from your super fund can be paid to your dependents, such as:

    • your spouse/partner
    • your children under 18 years of age
    • any person who is in an interdependent relationship with you (as the fund member)
    • any person who is financially dependent on you at the time of your death
    • the total available assets that you and your family own.

Add the two together and deduct from the total expenses your family will need to cover and the difference can represent the amount of life insurance coverage that you may need to provide for your family in the event of your death.

The calculator featured above uses a relatively simple equation to help you find an appropriate level of cover based on your annual income, total debts and children. It is worth noting that the estimate it provides should only be used as a general guide to help you receive a preliminary quote. Once you have received a preliminary quote, it is still worth speaking with an adviser to help you determine an appropriate amount of cover for your situation.

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How do I calculate what my premium will be?

Once you have received an estimate for the amount of cover to take out, you can submit your details in the form to have an insurer call you to discuss different cover options and provide you with a quote for cover?

Why can't I get an estimate for how much I will pay straight away?

Life insurance is an extremely complex product and an insurer will need to get some more details about your personal situation before they can provide you with an accurate quote.

What will impact my premium?

There are a number of factors that will impact what you pay for cover including;

  • How old you are
  • Whether you are male or female
  • Whether or not you smoke
  • Certain pre-existing medical conditions
  • The policy that you choose and premium structure

How can I reduce my premium?

  • Quit smoking - smoking can increase your premium by 100%!
  • Live a healthy life - health risks such as high blood pressure and obesity can impact what you pay
  • Pay your premium annually rather than monthly
  • Bundle different types of cover together rather than buying separately
  • Take out cover with your partner to receive a multi-policy discount
  • Fund your cover through superannuation

What is life insurance?

Life insurance provides a lump sum payment in the event of your death or if diagnosed with a terminal illness with less than 12 months to live. You can adjust your policy to also provide;

  • Cover if you suffer a total permanent disability
  • Cover if you suffer a serious trauma event. Most policies will cover up to 50 different injuries and illnesses
  • Cover for the costs of your beneficiaries to use a financial adviser following your death
  • Cover for the cost of your funeral. Some insurers will give you an advance payment of the benefit to cover the immediate costs of a funeral

Do I even need cover?

While you are alive and well you are doing everything you can to look after your family and ensure that they receive the best care, education, healthcare, social activities and opportunities. In the event of your death, life insurance provides a lump sum payment to ensure your family does not suffer financial hardship and can maintain their current way of life.

An unexpected death will not only cause emotional devastation but can also lead to severe financial hardship. The bills will need to be paid, the mortgage repayments made, the car needs fuel, the fridge and pantry need to be stocked and restocked, and the utilities need to be paid.

However, if you have life enough insurance, your family will be able to:

  • Receive a lump sum benefit to cover immediate and ongoing expenses
  • Pay the bills on time and avoid stressful credit letters
  • Preserve their credit rating by avoiding late notices to allow for future borrowings
  • Maintain their lifestyle to minimise the disruption in their lives
  • Stay in the family home for comfort and security
  • Have the time and space to decide how to proceed after your death, whether your spouse will keep working, and whether to move closer to other family members for support
  • Have the ability to make everyday and important life decisions with clarity, without being under financial pressure.

What if I don't have anyone financially dependent on me?

It could be worth considering other types of "living insurance" such as Trauma and TPD cover that provide a benefit if you suffer a serious illness or injury. This can ensure that you don't have to dip into your savings if you can't work for a significant period of time or ever again.

Receive an estimate for how much cover you may require

Prefer to talk?

1300 743 254

Office hours: Monday to Thursday 8am - 6:30pm, Friday 8am - 5:30pm

Richard Laycock

Richard is the senior insurance writer at and is on a mission to make insurance easier to understand.

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