Income Protection NZ Life Insurance Calculator

Our Life Insurance Calculator helps Australians estimate how much life cover they may need to protect their family’s lifestyle if they die. It works by adding up likely immediate costs and longer-term income needs, then subtracting resources your family may already have (such as cover inside super and savings). This matters because underinsuring can leave dependants with debt and cashflow stress, while overinsuring may increase premiums unnecessarily.

Before you start, gather recent figures for debts, superannuation, savings and any existing insurance. Use today’s balances where possible and round conservatively.

Step 1: Final Expenses (one-off lump sums)

1) Funeral expenses: enter an amount your family could realistically pay (include service, burial or cremation and related costs).

2) Medical expenses: allow for potential final medical or care gaps not covered by health insurance.

3) Mortgage: use your lender’s payout figure if available, including home and investment property loans.

4) Loans and debts: include credit cards, car finance, personal loans and any other liabilities.

5) Day-to-day expenses: set aside a short adjustment buffer (for example a few months of household costs).

6) Children’s education: total expected education costs you want funded.

7) Taxes: consider any likely tax liabilities for the year of death and other obligations.

8) Rainy day fund: add an emergency buffer for unexpected events.

Step 2: Continued Standard of Living (income replacement)

1) Annual income required: estimate the yearly income your family would need after debts are handled.

2) Years income required: choose how long to provide that income (for example until children are independent).

3) Assumed interest rate: use a conservative long-term return assumption, as higher rates reduce the lump sum needed.

Step 3: Existing arrangements (offsets)

1) Death cover in superannuation: include insurance and super savings payable on death.

2) Other life insurance cover: add total benefits from any existing policies.

3) Liquid assets: savings and investments that could be accessed relatively quickly.

4) Company and other benefits: enter the annual value of any ongoing government or employer payments your family may receive.

5) Income producing assets: include assets such as real estate that may provide income or be sold.

Step 4: Interpreting your result

Your result is an estimate of the life insurance cover amount that may bridge the gap between needs and existing resources. Treat it as a guide only: it does not consider your full objectives, financial situation or needs, and it does not account for product features, exclusions, waiting periods or underwriting. Consider reading relevant product disclosure information and, if needed, seek personal advice from a licensed adviser.