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Life Insurance Calculator

Work out how much life cover you need: enough to replace your income for the years your family would need it, pay off the home loan and other debts, and cover education and funeral costs, less your savings and the cover you already have in super.

$

A year: your take-home pay

years

Until your youngest is grown up

$
$

Car loans, cards, student loans

$

That your family could use

$

Default cover in your super, or your own policy

More options· $10,000 final costs
$

In total, to set aside

$
%

A year, above inflation

Life cover you need

$1,250,000

Your family would need $1,225,000; you already have $20,000 in savings and cover.

Income for 10 years
$700,000
Mortgage and debts
$515,000
You already have
$20,000

What this means

Life cover for 10 years is usually the cheapest way to get this cover: it pays out if you die during the term, and costs less the younger and healthier you are when you buy it. Choose a term that lasts until your children are grown up or your mortgage is paid off.

If no one depends on your income, you may need little or no life cover. Cover for your income if you’re too ill to work is often more important, and more likely to be needed.

Next step

How it adds up

Income for 10 years$700,000
Mortgage and other debts$515,000
Funeral and final costs$10,000
Your family would need$1,225,000
Less savings and investments-$20,000
Less cover you already have$0
Extra cover needed$1,205,000

What the cover pays for

Your family’s needs
  • Income for 10 years$700,000
  • Mortgage and debts$515,000
  • Final costs$10,000
Assumptions in this estimate
  • Each year’s income is simply set aside, with any interest on it just keeping up with inflation.
  • The amount is rounded up to a round figure, as policies are sold. It’s a starting point: a broker or adviser can look at your whole situation.
  • Most super funds include life (death) cover by default, often with total and permanent disability cover. Your fund’s statement shows how much.
  • Cover held in super is paid for from your super balance, so it doesn’t come out of your pay, but it does reduce your retirement savings.
  • Life insurance paid to a spouse or dependent children is generally tax-free.
Spotted a mistake? Tell us

How the calculator works

  1. Income to replace: what your family would need each year, usually your take-home pay, for the number of years you choose, such as until your youngest finishes school.
  2. Debts: your home loan and other debts, so your family could pay them off.
  3. Other costs: children’s education and funeral costs, under More options.
  4. Less what you have: savings and investments your family could use, and life cover you already have in super or your own policy.

The result is rounded up to a round amount, as policies are sold.

Example

To replace $70,000 a year for 10 years, clear a $500,000 home loan and $15,000 of other debts, and cover $10,000 of funeral costs, your family would need $1,225,000. With $20,000 of savings, that’s $1,205,000 of cover, so about $1,250,000 in total, including whatever your super already gives you.

Don’t forget

  • Check your super first: the default cover may already be a good part of what you need.
  • Several super funds can mean several sets of premiums. Combining them saves fees, but check you won’t lose cover you need first.
  • A stay-at-home parent needs cover too: replacing childcare and running the home costs money.

Learn more

See our insurance basics guide, the budget calculator to fit the premium in, and the net worth calculator to add up what you’d leave.

Last updated

Frequently asked questions

How much life insurance do I need?

Enough to replace your income for as long as your family would rely on it, clear your home loan and debts, and pay for anything else you want covered, less your savings and the cover you already have, including the default cover in your super.

Do I already have life insurance in my super?

Probably. Most super funds give members death cover, and often total and permanent disability (TPD) cover, by default. Your annual statement or your fund’s app shows how much, and you can usually increase it.

Is it better to hold life insurance inside or outside super?

Inside super, the premiums come out of your super balance rather than your pay, which helps your budget but reduces your retirement savings. Outside super, you pay from your own pocket but may get broader cover. Many people use both.

Are life insurance payouts taxed?

A payout to your spouse or dependent children is generally tax-free. Payouts from super to adult children who weren’t financially dependent on you can be taxed.

Do I need income protection too?

Often, yes. You’re more likely to be unable to work for a while than to die young. Income protection usually pays up to 70% of your income while you can’t work, and some super funds include it.