How much insurance
do you actually need?
Life insurance needs analysis and income protection gap calculator — sized to your dependents, debts and earning years, not a salesperson’s spreadsheet.
Around 9.3 million Australians hold life cover through their super — most of it default cover they never actively chose.
Group cover inside super is the country’s quiet safety net: cheap, automatic and nearly universal. It is also often thin — the actuarial research finds the median policy replaces only a fraction of what a family would actually need, and just one in three of us understand the cover we hold. So it is worth modelling your own position — what your family would need with the life insurance needs calculator, and how far your cover sits below the 70% income-protection ceiling — before assuming the default is enough. General information only, not personal advice.
How Australians actually hold their cover
Nearly 70% of insured Australians hold their life cover inside super — usually automatic default cover — while about 30% hold a retail or direct policy they chose and were underwritten for. Default super cover is cheap and near-universal but often modest; retail cover is tailored but lapses more often.
All Insurance calculators
2 calculatorsLife Insurance Needs
Calculate how much life cover your family needs to maintain their lifestyle if you were to pass away. Models income replacement, debt clearance, and future expenses.
Income Protection Gap
See the gap between your current income protection cover and the 70% of income insurers typically allow. Know if you're under-insured.
Understanding Personal Insurance in Australia
Most Australians are significantly under-insured. Research consistently shows that the average Australian family would face serious financial hardship within three months if the primary income earner died or could no longer work. Yet insurance is one of the most commonly neglected areas of personal finance.
Types of Personal Insurance
- Life Insurance (Death Cover): Pays a lump sum to your nominated beneficiaries if you die. Used to clear debts, replace lost income, and fund future expenses like children's education. Can be held inside or outside of super.
- Income Protection: Pays up to 70% of your pre-disability income (monthly) if you can't work due to illness or injury. Typically has a waiting period of 30–90 days and a benefit period of 2 years, 5 years, or to age 65. Premiums are generally tax-deductible when held outside super.
- Total and Permanent Disability (TPD): Pays a lump sum if you become permanently unable to work. Helps fund care, home modifications, and living expenses long-term.
- Trauma / Critical Illness: Pays a lump sum on diagnosis of specified conditions (heart attack, cancer, stroke). Covers immediate treatment costs and lifestyle adjustments.
How Much Life Insurance Do You Need?
A common starting point is 10× your annual income, but this is a crude approximation. A proper needs analysis considers your outstanding debts (especially the mortgage), the number of years your income needs to be replaced, your partner's earning capacity, childcare and education costs, and any existing cover in super. Our Life Insurance Needs calculator takes all of these into account.
How Much Income Protection Do You Need?
Most income protection policies cover up to 70% of your pre-disability income. If you're already working and not insured, check how long your sick leave and emergency fund would last — for most people it's a matter of months. If you have existing income protection in your super fund, check the benefit period: many industry super policies pay for only 2 years, which leaves a long gap if you have a serious illness. Our Income Protection Gap calculator shows exactly where you stand.
Insurance Inside vs Outside Super
Life insurance and TPD can be held inside your superannuation fund, which has the advantage of being funded from pre-tax super contributions. However, the cover levels inside super are often insufficient and the definitions (especially for TPD) can be more restrictive. Income protection held outside super has tax-deductible premiums and typically has more flexible benefit terms. Most comprehensive insurance strategies use a combination of both.