Insurance Cover Calculator

About you

Five short sections, one kind of cover at a time. Round figures are fine.

Your age (exact — the maths needs it)iUsed to work out how many years income protection payments would last when they run to age 60 or 65.

Yearly income before tax (salary only)iYour salary before tax is taken out, not counting bonuses, commissions, rent or dividends. Income protection is priced off this figure.

What would your household spend in a year, without the mortgage?iWhat the household would still spend in a year if the mortgage were gone — groceries, bills, insurance, running the car, rates. Leave out the mortgage repayments: the cover pays the loan off in full and that amount is already counted, so putting the repayments here as well would count the same money twice. Leave out the children's costs too; they are counted separately in the next section.

If your family had to carry on without your income, this is the figure that has to be replaced. The mortgage is counted separately and paid off in full, so counting the repayments here as well would inflate the number twice over. Leave it blank and we will use your before-tax salary, which overstates it.

Home (principal residence) mortgageiWhat you still owe on the home you live in. The estimate assumes this loan would be paid off in full if you died or became totally and permanently disabled.

Years left on that mortgageiRoughly how long until the home loan is paid off. It does not change any dollar figure: it is only used to check whether your income protection payments would last as long as the mortgage.

Your super balance Current superannuation balance (the account balance only, not the insurance inside it)iThe dollar balance on your latest super statement, added up across all your super accounts. Leave out the life and TPD cover held inside super: you enter those in the next sections. This figure is taken off the life cover estimate only, as money your family could use if you died.

I'm not sure

Other assets Other assets you could sell or draw on (shares, an investment property, cash and savings: not your home or your super)iA rough total of what these are worth today, less any loan secured against them. For example, an investment property worth $600,000 with a $400,000 loan counts as $200,000. Leave out the home you live in and your super (asked above). This figure is taken off the life cover estimate only, as money your family could use if you died.

I'm not sure

Other debts (investment loans, car loans, credit cards etc.)iAnything you owe apart from the mortgage on your home. These debts are shown in your results but are not added to your cover needs automatically.

Other debts are shown separately and are not added to your cover needs automatically. Which of them to insure is your decision: how other liabilities are treated is discussed and agreed with an adviser as part of an insurance needs analysis.

If you died

This section is about life cover — a lump sum paid to your family. It is worked out from what the household actually spends, not from your income.

Funeral costs (what you'd want covered)iThe funeral and the immediate costs your family would face straight away. Preset to $15,000: change it to your own figure.

Dependent childreniChildren who rely on you financially. For each one, the yearly cost you choose is multiplied by the years until the age you want them supported to.

If you died, how many years would your partner need the household covered?iYour yearly household spending multiplied by this many years. Pick 0 if you have no partner, or if they could carry the household on their own income.

Life cover you already hold Life cover in your super (check your statement — we show you where to look)iThe lump sum your insurance would pay your family if you died, often called death cover. It is on your super statement or your fund's online account. If you also hold life cover outside super, add it in.

I don't have my statement handy

If you became totally and permanently disabled

This section is about TPD cover — total and permanent disability. It may pay a lump sum if you become totally and permanently disabled and meet the policy's definition and claim conditions.

Medical costs if seriously ill or disabled (choose one to continue)iTreatment, rehabilitation and the gap between what Medicare and private cover pay and what you are actually billed. There is no standard figure — it depends on the condition, the treatment and what your health cover picks up.

Choose a figure to continue

Home changes if you became disabled (choose one to continue)iRamps, a bathroom you can use in a wheelchair, widened doorways, a stairlift. Roughly $100,000 per storey of the home you live in.

Choose a figure to continue

TPD cover you already hold TPD cover in your superiTPD cover may pay a lump sum if you become totally and permanently disabled and meet the policy's definition and claim conditions. Insurers define this differently (for example unable to work in your own job, or in any job that suits your training), so the definition in your policy decides whether a claim is paid. The amount is on your super statement.

I don't have my statement handy

If you couldn't work for a while

This section is about income protection. It provides regular payments if illness or injury prevents you from working, subject to waiting periods, benefit limits and policy conditions. Reduced payments may continue during a partial return to work. It is the cover people most often hold without knowing the detail, so take these four slowly.

What you would need How long could you get by on savings before money had to start arriving?iThis sets your waiting period — the gap between stopping work and the first payment. A longer wait makes the policy cheaper, but you have to fund that whole gap yourself out of savings, leave and sick pay. How long would the payments need to keep coming?iThis sets your benefit period — how long the policy keeps paying before it stops. Cover inside super very often stops after two years — that pattern is visible in APRA’s published data on default insurance design across MySuper products, and it is the single most common surprise at claim time. Think about how long the mortgage runs and how long the children are at home. Should super contributions keep being paid while you are off work?iWhile you are on claim your employer is not paying super for you. Some policies add a contribution on top of the monthly benefit so your retirement savings keep building. It costs more.

Income protection you already hold Monthly benefit (check your statement)iThe amount the policy would pay you each month. Many super funds set a default of around $1,000 a month regardless of what you earn, which catches people out.

Waiting period on that policyiHow long you must wait, unable to work because of illness or injury, before the policy starts paying. Policies commonly offer from about 14 days up to two years; a longer wait usually means a lower premium, but you fund that gap yourself. It is on your policy schedule or your fund's insurance guide.

Benefit period on that policyiHow long the monthly payments keep coming if you remain unable to work. Common choices are two or five years, or up to a set age such as 65. When the benefit period ends, the payments stop even if you still cannot work.

I don't have my statement handy

If you were seriously ill

This section is about trauma cover — sometimes called critical illness. It may pay a lump sum if you experience a specified illness or medical event, such as certain cancers, heart attacks or strokes, and meet the policy's definitions and conditions.

Nothing extra to enter here — the figure is built from what you have already told us: your medical costs, plus roughly two years of income while you are treated, less whatever your income protection already pays. This assumes income protection benefits are payable. In practice, a trauma event does not necessarily qualify for income protection, and actual benefits may be lower or unavailable.

Trauma cover you already hold Trauma cover (usually held outside super — often none)iTrauma cover generally cannot be held inside super, so if you have it, it will be a separate policy you pay for yourself. Most people have none, which is a legitimate answer.

Your indication

A four-quadrant check — each need built from YOUR numbers, with the connections between covers already accounted for so nothing is double-counted.

Important Information

The calculator does not recommend any financial product or class of financial product and is not a substitute for financial advice or intended to be relied upon when making financial product decisions.

The estimates generated by the calculator are based on default assumptions or assumptions you have entered, and actual outcomes may differ if your personal circumstances, legislation or other relevant factors change over time.

The information (and results) provided by this calculator are based on the information you enter and may not take into account all of your personal circumstances, including your current lifestyle expenses, other financial commitments, needs and objectives.

You should consider your overall financial situation, needs and objectives before making any financial decision. Consider seeking advice from a licensed financial adviser who can develop a financial plan tailored to your needs and objectives, and review your calculations regularly as your circumstances, financial markets, tax laws and other rules may change over time.

Default assumptions and calculation methodology

Default assumptions

Véurr considers the preset figures below to be reasonable starting points for a general estimate. You can change any of them.
Each answer you give is used everywhere it applies, for every type of cover it feeds into. A small change to one answer can move the results a long way.
Preset figures: funeral costs $15,000; each child’s yearly cost $15,000, supported to age 25 unless you choose 18 or 21. Medical costs and home changes have no preset: you choose them before you can go on.
If you answer “I’m not sure”: 10 years is used for how long the household would need covering, 90 days for how long you could get by, and 5 years for how long payments would need to last. If you do not enter an age, 40 is used. Each one is listed with your results. For your super balance and other assets, “I’m not sure” or a blank means they are left out: no figure is assumed.
Cover you already hold is taken as the amounts you enter. If you leave one blank, none is assumed and the results say so.

How each answer is used

Age sets how many years are left to 60 or 65, for income protection that runs to an age.
Yearly income before tax (salary only) sets the income protection need, the income part of trauma, and the household figure if you leave household spending blank.
Household spending (without the mortgage) is multiplied by the number of years you choose on the life cover screen. If you leave it blank, your before-tax income is used instead, which overstates it.
Home mortgage is counted in full in the life cover and TPD figures. The years left on it do not change any dollar figure; they are only used to check that the income protection period you choose lasts as long as the mortgage and your children’s support.
Super balance reduces the life cover figure only.
Other assets (entered after any loan secured against them) reduce the life cover figure only. They are not used to reduce TPD, trauma or income protection. If you became disabled or seriously ill you would still be alive, and many people do not want to sell their shares, an investment property or their savings to meet those costs, so the calculator does not assume you would.
Other debts are shown with your results but are not added to any figure automatically. Which liabilities to insure is your decision: how other liabilities are treated is discussed and agreed with an adviser as part of an insurance needs analysis.
Funeral costs, children and household years are used in the life cover figure only.
Medical costs are used in the TPD and trauma figures; home changes in the TPD figure only.

How each figure is worked out

Life cover = home mortgage + funeral costs + each child’s yearly cost × the years until the age you chose + household spending × the years you chose. Your super balance is then taken off, then other assets. The figure never goes below $0.
TPD = home mortgage + medical costs + home changes. No assets or other financial resources are deducted: not super, not other assets and not income protection. This is a simplified calculation and may not reflect all costs or financial resources relevant to a permanent disability. Some advisers reduce the TPD amount to allow for income protection already in place, because income protection can keep paying while you are unable to work. This calculator does not; how the two are combined for you is agreed with an adviser.
Trauma = medical costs + 2 years of income, less the income protection you hold for those years. This assumes income protection benefits are payable. In practice, a trauma event does not necessarily qualify for income protection, and actual benefits may be lower or unavailable.
Income protection = 70% of your salary-only income a year, plus super contributions at 12% of income if you choose them. Actual income protection benefits may be affected by policy limits, waiting periods, benefit periods, income offsets and other terms.
Waiting period: if the policy you hold waits longer before paying than you said you could get by, the extra days are counted at the daily rate of the income protection need and shown as money you would have to find yourself.
Benefit period: while the policy you hold pays, any shortfall in the monthly amount is counted for each year it pays. If it stops before the years you said you would need, every year after it stops is counted at the whole yearly need, because a policy that has stopped pays nothing. Such a policy is never shown as “roughly right”; if its monthly amount is enough, the result reads “stops after x of y years”. These comparisons are made only when you enter a monthly benefit you hold.
“Roughly right” means the cover you hold is within 10% of the figure, and never more than $25,000 short.

Money and tax

Figures are in today’s dollars and are simple totals: nothing is added for inflation and nothing is taken off for investment returns on a payout.
No tax is worked out anywhere in this estimate, and nothing in it assumes whether cover is held inside or outside super. Tax on insurance or super death benefits depends on how the cover is held and who receives it. That is discussed in advice.

What the calculator does not consider

Whether you would be eligible for cover (for example because of your health, your job or your age), what it would cost, or whether you could afford it.
Policy definitions, exclusions and premiums, the rules of your super fund, and private health insurance.

How do I fix this?

Three ways forward, in order of how much they ask of you. Start wherever you like.

Before you rely on this figure. Speak to an adviser to confirm whether the number you have arrived at is right for your situation, and what it would mean if your insurance is not structured correctly. This tool works only from what you entered here — it cannot see your health, your policy wording, or the rest of your position.

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