Skip to content
FinanceWith Ease
Change country: New Zealand

Choose your country

Australia Canada Ireland New Zealand United Kingdom United States

Life Insurance Calculator

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

$

A year: your take-home pay

years

Until your youngest is grown up

$
$

Car loans, cards, student loans

$

That your family could use

$

Through work, mortgage cover, or your own policy

More options· $10,000 final costs
$

In total, to set aside

$
%

A year, above inflation

Life cover you need

$1,200,000

Your family would need $1,170,000; you already have $15,000 in savings and cover.

Income for 10 years
$600,000
Mortgage and debts
$560,000
You already have
$15,000

What this means

Life insurance 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$600,000
Mortgage and other debts$560,000
Funeral and final costs$10,000
Your family would need$1,170,000
Less savings and investments-$15,000
Less cover you already have$0
Extra cover needed$1,155,000

What the cover pays for

Your family’s needs
  • Income for 10 years$600,000
  • Mortgage and debts$560,000
  • 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.
  • If you took out cover with your mortgage, count it in the cover you have.
  • New Zealand has no inheritance tax, so the payout goes to your family in full.
  • Cover through work usually ends when you leave the job, so it’s worth having some of your own.
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 mortgage 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 through work, your mortgage or your own policy.

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

Example

To replace $60,000 a year for 10 years, clear a $550,000 mortgage and $10,000 of other debts, and cover $10,000 of funeral costs, your family would need $1,170,000. With $15,000 of savings, that’s $1,155,000 of cover, so about $1,200,000.

Don’t forget

  • KiwiSaver is paid to your estate if you die, so count it in your savings if your family would get it.
  • Illness is the gap: ACC only covers accidents, so life and income cover for illness matter more in New Zealand than you might expect.
  • 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 mortgage and debts, and pay for anything else you want covered, less your savings and any cover you already have through work or your mortgage.

Does ACC cover me if I die?

Only if your death is caused by an accident. ACC then helps with funeral costs and pays your family weekly compensation for a time. It doesn’t cover death from illness, which is far more common, so life insurance fills that gap.

Is mortgage protection insurance the same as life insurance?

Not quite. Mortgage protection usually covers your mortgage repayments if you can’t work, or clears the loan if you die. Life insurance pays a lump sum your family can use however they need.

Are life insurance payouts taxed in New Zealand?

New Zealand has no inheritance tax, so a life insurance payout goes to your family in full.

Do I need income protection too?

Often, yes. ACC covers injuries, but not illness. Income protection usually pays up to 75% of your income if illness stops you working.