Overview

Choosing the right amount of life insurance depends on your personal financial situation, responsibilities, and goals. In this guide, we’ll walk through a clear and practical way to figure out how much cover you may need, and why it matters.

What Life Insurance Is Meant to Do

Life insurance is designed to help the people you care about if you’re no longer around. It can provide financial support for everyday living expenses, clear outstanding debts, and give your family time to adjust. Most importantly, it gives peace of mind knowing they’ll have a financial buffer.

How to Work Out How Much You Might Need

Here’s a simple step-by-step approach:

Step 1: Add Up Your Debts

• Mortgage balance
• Personal loans or car loans
• Credit card debt

Step 2: Consider Family Living Costs

• Ongoing household expenses
• School fees
• Childcare
• Groceries, bills, and transport

Multiply this by the number of years you want to support your family for.

Step 3: Add Future Plans

• A lump sum for university, renovations, or helping your partner reduce work hours

Step 4: Subtract What You Already Have

• Savings
• Investments
• Superannuation balance
• Existing life cover

Example:

• $450,000 mortgage
• $30,000 other debt
• $60,000 annual living costs × 10 years = $600,000
• $100,000 to support future goals
• Total: $1,180,000
• Minus $180,000 in savings and super = Recommended cover: $1,000,000

FAQs

Is it possible to have too much cover?

Technically, yes — because more cover means higher premiums. It’s about finding the right balance for your situation.

What if my situation changes?

Most life insurance policies can be updated as your life changes. It’s a good idea to review it every couple of years or after a major life event.

Does life insurance through my super count?

It does, but often it’s not enough. Most default super cover is between $100,000 and $250,000, which may not be enough for a family.

Final Thought

There’s no perfect number, but making a thoughtful estimate gives you and your loved ones peace of mind. You can always speak to one of our team to talk it through.

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