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Insurance

How much life insurance do you actually need?

Donmont Capital · Financial advice for Australians

There’s no single number — the right amount of life cover is what would let your family keep their standard of living if you weren’t here. A practical way to size it is to add up what needs paying, then subtract what you already have.

Add it up

Then subtract

Take off your existing cover (including the default life cover in your super), plus savings and any assets your family could reasonably draw on. The gap is roughly what you need to insure.

Reality check. Most people’s default super cover falls well short of this number — the gap between what you have and what you’d need is the whole point of the exercise. A quick review puts a real figure on it.
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Frequently asked questions

How much life insurance do I need?

Enough to clear your debts, replace your income for the years your family would need it, cover future costs like education, and pay final expenses - minus your existing cover and savings. The remainder is your gap.

Does my super already include life insurance?

Usually yes, as default cover - but the amount is often well below what a family with a mortgage and children actually needs. Check your statement and compare it to the figure above.

Should I include my partner’s income?

Factor in your household’s full picture. If both of you earn, you each may need cover; if one income carries the household, that person’s cover is the priority.

Not sure which fund is right for you?

Get a complimentary, no-obligation review of your fees, performance and insurance from a licensed Donmont adviser.

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Sources & important information

General advice warning. This information is general in nature only and does not take into account your objectives, financial situation or needs. It is not personal financial advice. Before acting on it, consider whether it is appropriate for you and read any relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD). Consider seeking personal advice from a licensed financial adviser. Donmont Capital is an Authorised Representative (No. 1302126) of Gill & Co Advisory Pty Ltd (AFSL No. 551560).

Sources. Figures referenced are drawn from recognised public sources including the ASFA Retirement Standard, the Australian Taxation Office (ATO), APRA and ASIC’s Moneysmart. All figures are indicative and current only as at the periods stated; superannuation rules, thresholds, balances and returns change over time. Verify current figures with the original source before relying on them.

Calculators & estimates. Any calculator or projection here is a simplified estimate for general illustration only, relies on assumptions that may not reflect your situation, and is not a guarantee of future outcomes.

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