Income Protection NZ Family Life Insurance Calculator

Our Family Life Insurance Calculator helps Australian families estimate how much life insurance, trauma cover and TPD insurance may be needed to protect dependants if a parent dies, becomes totally and permanently disabled, or suffers a serious illness. It is important because underinsurance can leave surviving family members with mortgage stress, education costs, and reduced income at the worst possible time, while overinsurance can strain household cash flow. This calculator uses a capital-needs approach, then offsets existing cover and usable assets to highlight any likely shortfall.

Before you start, gather your latest loan balances, payslips or tax estimates, existing policy schedules, and superannuation statements so each entry reflects your current position.

1. Household snapshot: Enter number and ages of dependants, mortgage and other debts to clear, final and estate costs allowance, education funding required, liquid assets available, and any assets to preserve. Then set how many years household support should last and the assumed after-tax earning rate (a conservative long-term rate generally produces more resilient results).

2. Husband details: Add age, target retirement age, employment status, gross annual income, and the annual net household contribution (the amount the family truly relies on). Include personal expenses that would cease, childcare or domestic replacement costs, and a one-off spouse transition fund.

3. Wife details: Complete the same fields to capture the full two-income and caregiving picture, including unpaid work replacement costs where relevant.

4. Existing personal insurance: Enter current Life, Trauma and TPD held outside super so the calculator focuses on the gap, not the total.

5. Superannuation: Record each partner’s super balance plus insured death and TPD benefits in super, then apply the usable super factor to allow for access and tax considerations.

6. Trauma and TPD assumptions: Set medical and rehab allowances, income replacement months, debt relief targets, home modification and care allowances, and a TPD income replacement ratio to retirement.

7. Review and calculate: Check entries for realism, then calculate to view the recommended cover mix by partner and the coverage comparison and gap analysis. Treat the “gap” as the additional cover to investigate, and use the breakdown to understand what is driving the need (debts, living costs, education, care, or income replacement).

This calculator provides general information only and does not consider your objectives, financial situation or needs. Consider the relevant Product Disclosure Statement and, if appropriate, seek personal advice before acting.