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Welcome

Congratulations on taking an important step towards understanding how you can safeguard you or your family's livelihood should you or your partner fall sick, have and accident or pass away.

Insurance is one of the ways you can protect the things that matter most and this calculator will help you figure out how much term life and income protection insurance you may need.

The whole process should take no more than five minutes. Along the way you will be asked about your income, assets and debts (such as mortgages and credit cards), as well as how much insurance you already have. This will help us form a picture about your ongoing financial needs with most of this information being used to calculate your term life needs.

It helps if you understand how much it costs to maintain your lifestyle each year or to raise your kids. If you have the time, take a look at the following areas before you get started – whether you take out insurance or not, you'll learn some fascinating things:

It's important to note this calculator provides general information only and is based on what you tell me, so you might want to get advice to understand your insurance needs in more detail.

You can click the "Previous Step" and "Next Step" buttons below to review or change your Lifewise, helping you to get wise on life insurance.

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Personal Needs

Larry

This is the first of four easy steps in working out your insurance needs – just tell us about you. The information symbol next to each field will clarify what we're asking and why.

Not sure about which occupation category to use? Here's some help:

  • Professional: Accountant, Doctor, Economist, Engineer (office based), Solicitor
  • White Collar: Clerical worker, Librarian, Receptionist, School Teacher (non-manual subjects)
  • Light Manual: Retailer, Electronic Technician, Waiter/Waitress, Home Duties
  • Blue Collar: builder, Chief, Mechanic, Nurse, School Teacher (manual subjects)
  • Heavy Blue Collar: Ambulance Driver, Bobcat Operator, Bus Driver, Plumber, Painter
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Simple

We need to know a little bit about your basic financial position and what insurance cover you already have, remembering that you may already have insurance if you have superannuation.

In the assets area, it's important that you only include things you family or partner would be willing to sell if you die. Some things may wish to be kept.

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  • You (with Life Cover)
  • You (with TPD)
  • Partner (with Life Cover)
  • Partner (with TPD)

Income for Children

Income for Partner

Debt Repayment

Super Contributions

Expenses on Death

Suggested Amount

$ 11,000 p.a.

$ 73,700 p.a.

$ 1,000 once

9% income p.a.

$ 20,000 once

Selected Amount

Selected Term Life Cover

$ 0

Your Existing Term Life Cover

$ 0

Your Insurance gap is

$ 0

Just letting you know you can choose to exclude or reduce any of the above amounts from your suggested level of cover if it better suits your financial needs. To exclude an amount from the suggested cover, just set the selected cover to $0. Or you enter a lower amount.

Oh and remember that your income protection needs calculation is a little more straightforward so there's no need for me to include it here. It can be found in the next section.

One more thing – you may find that each area doesn't always add up to the total. This is just a small rounding difference.

Income for Children

Income for Partner

Debt Repayment

Super Contributions

Expenses on TPD

Suggested Amount

$ 11,000 p.a.

$ 73,700 p.a.

$ 1,000 once

$ 20,000 once

Selected Amount

Suggested TPD Cover

$ 0

Selected TPD Cover

$ 0

Your Existing TPD Cover

$ 0

Your Insurance gap is

$ 0

Just letting you know you can choose to exclude or reduce any of the above amounts from your suggested level of cover if it better suits your financial needs. To exclude an amount from the suggested cover, just set the selected cover to $0. Or you enter a lower amount.

Oh and remember that your income protection needs calculation is a little more straightforward so there's no need for me to include it here. It can be found in the next section.

One more thing – you may find that each area doesn't always add up to the total. This is just a small rounding difference.

Income for Children

Income for You

Debt Repayment

Super Contributions

Expenses on Death

Suggested Amount

$ 11,000 p.a.

$ 73,700 p.a.

$ 1,000 once

9% income p.a.

$ 20,000 once

Selected Amount

Selected Term Life Cover

$ 0

Partner's Existing Term Life Cover

$ 0

Partner's Insurance gap

$ 0

Just letting you know you can choose to exclude or reduce any of the above amounts from your suggested level of cover if it better suits your financial needs. To exclude an amount from the suggested cover, just set the selected cover to $0. Or you enter a lower amount.

Oh and remember that your income protection needs calculation is a little more straightforward so there's no need for me to include it here. It can be found in the next section.

One more thing – you may find that each area doesn't always add up to the total. This is just a small rounding difference.

Income for Children

Income for Partner

Debt Repayment

Super Contributions

Expenses on TPD

Suggested Amount

$ 11,000 p.a.

$ 73,700 p.a.

$ 1,000 once

9% income p.a.

$ 20,000 once

Selected Amount

Suggested TPD Cover

$ 0

Selected TPD Cover

$ 0

Partner's Existing TPD Cover

$ 0

Partner's Insurance gap

$ 0

Just letting you know you can choose to exclude or reduce any of the above amounts from your suggested level of cover if it better suits your financial needs. To exclude an amount from the suggested cover, just set the selected cover to $0. Or you enter a lower amount.

Oh and remember that your income protection needs calculation is a little more straightforward so there's no need for me to include it here. It can be found in the next section.

One more thing – you may find that each area doesn't always add up to the total. This is just a small rounding difference.

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  • You
  • Partner

Type of Cover

Term Life

Total & Permanent Disability

Income Protection

What's it for?

Pays a lump sum on your death or the diagnosis of a terminal illness, allowing your family to focus on supporting each other, not worrying about paying about the bills.

This is to provide cover for expenses such as modifications to your house or car, specialised medical equipment etc.

Provides a replacement income of up to 75% of your current income if you are unable to work due to illness or injury, ensuring that your everyday expenses and even your debt repayments are taken care of.

How much cover should I Consider?

Suggested Cover:

$ 1,850,000

Selected Cover:

$ 1,850,000

Suggested Cover:

$ 1,850,000

Selected Cover:

$ 1,850,000

Suggested Cover:

$ 1,850,000

Talk to your fund - your fund may already have an insurance offering that suits your needs.Find out more

Get some advice - you may feel that discussing your individual needs with a financial planner may be a wiser choice.Find out more

Go direct - you may feel more comfortable approaching an insurance company directly.Find out more

Larry

Some final words for me. The insurance needs presented above are based on the information you have supplied but don't take account of any other information that might affect your or your family's personal financial position. You might want to contact a financial adviser who can assess your specific needs in more detail.

Thanks for taking the time to understand your insurance needs better. If you want to find out more, there's a wealth of simple, straight talking information on this website and I encourage you to explore it further. Please check out the links above or click here to return to the homepage.

Type of Cover

Term Life

Total & Permanent Disability

Income Protection

What's it for?

Pays a lump sum on your death or the diagnosis of a terminal illness, allowing your family to focus on supporting each other, not worrying about paying about the bills.

This is to provide cover for expenses such as modifications to your house or car, specialised medical equipment etc.

Provides a replacement income of up to 75% of your current income if you are unable to work due to illness or injury, ensuring that your everyday expenses and even your debt repayments are taken care of.

How much cover should I Consider?

Suggested Cover:

$ 1,850,000

Selected Cover:

$ 1,850,000

Suggested Cover:

$ 1,850,000

Selected Cover:

$ 1,850,000

Suggested Cover:

$ 1,850,000

Talk to your fund - your fund may already have an insurance offering that suits your needs.

Get some advice - you may feel that discussing your individual needs with a financial planner may be a wiser choice.

Go direct - you may feel more comfortable approaching an insurance company directly.

Larry

Some final words for me. The insurance needs presented above are based on the information you have supplied but don't take account of any other information that might affect your or your family's personal financial position. You might want to contact a financial adviser who can assess your specific needs in more detail.

Thanks for taking the time to understand your insurance needs better. If you want to find out more, there's a wealth of simple, straight talking information on this website and I encourage you to explore it further. Please check out the links above or click here to return to the homepage.

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Notes and Assumptions

The insurance needs presented earlier are based on the information you have supplied but don't take into account any other information that might affect you or your family's personal financial position. You may want to get advice from a financial planner before making any financial decisions.

Item

Term Life Cover Expenses

TPD expenses

Future rate of growth in income, per year

Future rate of investment earnings, per year

Provide for future superannuation contribution up to age

Provide for future income for partner up to age

Provide for future income for children up to age

Assumed age gap between children

Provide for income protection monthly benefit of

Does your existing income protection benefit increase with inflation each year?

Would your existing income protection cover cease if you make a TPD claim?

Value

Description

This is to provide cover for expenses such as funeral, legal expenses, etc.

This is to provide cover for expenses such as modifications to your house or car, specialised medical equipment, etc.

This is the rate at which your salary is assumed to increase each year. The default is 3.5% which allows for 2.5% price inflation (Consistent with Reserve Bank range) and 1% to allow for the fact that earnings typically grow slightly faster than inflation.

This is the rate of return that you and your family will need to earn on any insurance payout in order to achieve the desired level of income. The default is 6.50% per year. A lower rate will be easier to attain, but will result in the higher suggested cover and hence a higher cost of insurance.
You should be realistic when setting these values. Information about risk and rates of return can be found on the FIDO website http://www.fido.asic.gov.au/ in the Money tips section.

This is the age to which you wish to continue contributing to your superannuation fund. Age 65 has typically been used as the normal retirement date for Australian superannuation funds and is the default for this assumption.

Where applicable, this is the page to which you wish to provide future income for your partner. If the other assumptions hold then the income will cease when you would have turned this age, irrespective of your's partner age. The default age is 65. This has typically been used as the normal retirement date for Australian superannuation funds.

Where applicable, this is the age to which you wish to provide future income for your children. If the other assumptions hold then the income for each children cease when they turn this age. The Australian Tax office uses age 21 to determine dependents but increase this where the child is continuing to study. 21 has been used as a default for this assumption.

The age gap between children is used to estimate the age of each of your children, based on the age of youngest child that you have provided. The default is two years as this is a typical age gap.

This is the proportion of your income that you wish to insure through income protection. The default is 75% as this is the maximum that you can insure (excluding any allowance for replacement of superannuation contributions) with most insurers in Australia.

Depending on your insurance policy, once you have made a claim, your income protection benefit can either remain the same in each year or increase over time.Select "Yes" if your income protection benefit increases in line with inflation in each year under your existing policy.

Select "Yes" if your income protection cover would cease if you made a TPD claim under the terms of your existing income protection policy.

The insurance needs presented earlier are based on the information you have supplied but don't take into account any other information that might affect you or your family's personal financial position.

You may want to get advice from a financial planner before making any financial decisions.