Why use this calculator?
Firstly, do you know how much life insurance coverage you should have? Is the current life insurance that you get with your super enough to protect your family?
Though this is only a simple tool and doesn't take in a lot of factors it should at least to motivate you that you should focus on saving more now!
Why don't you check out a few of our Insurance articles?
It is important to understand that our financial calculators...any financial calculators are just broad estimates based around some simple mathematics and a LOT of assumptions, and realistically, long term projections are pretty rubbery considering what may or may not happen with your actual life. This calculator is intended as an educational tool only that provides estimates on how much life insurance you should have in the case of death or total and permanent disability. It also creates a scorecard comparing your existing level of life insurance with our recommendation.
This calculator does not take into account all of your particular objectives, financial situation and needs that may alter your view on how much life insurance you require.
This calculator uses the following assumptions and methodology to estimate how much life insurance you should have: What this calculator estimates 1. This calculator works out the approximate net monthly income of the user based on current tax rules applicable at July 1, 2009. 2. This calculator works out the user's total assets by adding together the values provided for your bank accounts, your home value, value of any direct share holdings, managed funds other investments and your superannuation balance. 3. This calculator works out the user's total debts that would need to be paid out in the case of the user's death by adding together the values provided for outstanding home loans, credit cards, car loans, personal loans and investment loans. 4. This calculator then calculates some lump sum payout values which could be invested to generate an income for the beneficiary to cover either replacing the user's income or to cover current expenses. It calculates those numbers by presuming that the lump sum payout would be invested to give an after fees and taxes return of 5% and cover the payout to the beneficiary monthly for 10 years. It should be noted that this number of 10 years coverage is a common scenario, your own personal preferences may be to cover those monthly payouts for a longer or shorter period of time. 5. If calculator then creates three recommended scenario numbers to help the user understand how much insurance coverage they should have: 6. Lump sum to cover income replacement for 10 years plus enough to payout all outstanding debts. 7. Lump sum to cover expense replacement for 10 years plus enough to payout all outstanding debts. 8. Lump sum to cover payout of all outstanding debts only - no monthly contribution towards income replacement or expense coverage.. This calculator uses your current annual salary to calculate the net after tax income that you are bringing into the household as one of the key figures it requires for estimating the cost of income replacement in the case of your death or total and permanent disability.Assumptions and disclaimers about this calcualtor
Limitations
Assumptions and methodology
Data fields within this calculator
My current annual gross salary field
Monthly Living Expenses (less loan repayment)
This calculator asks for your current monthly living expenses less loan repayments as it wants to understand how much money you should be covering if in the event of death or TPD when all your debts will be paid out (presuming you have all your debts covered as a minimum).
