How much Life, TPD and Trauma cover do you each actually need — and what income protection benefit should you target? This tool capitalises your family’s future needs the way professional planning software does: it values your ongoing living costs and your partner’s continuing income over your life expectancy in today’s dollars, then compares the result with the cover you already hold.
Indicative only — general information, not personal advice. Cover amounts are a guide; we confirm exact needs and recommendations through your adviser.
Figures and assumptions current as at . Your answers save on this device only — nothing is sent to us unless you submit. The estimate is produced by a fixed calculation from a limited set of inputs; it is not a recommendation that any amount of insurance is suitable or sufficient for you.
Your household
You
$
Your partner
$
Household commitments & assumptions
Debts to clear if the worst happened
$
$
$
$
Total debts to clear$0
Children & one-off provisions
$
A per-child allowance toward remaining K–12 and university costs — adjust to your plans.
$
$
A cash cushion on top of the calculated need.
Beneficiary investment profile: Conservative (editable) — the return a surviving partner could conservatively earn on invested proceeds.
If something happened to… (per-person needs)
You
$
Defaults to 75% of household income — edit to suit.
$
If this person died or was disabled, what would it cost to replace the care and household work they provide — nannies, childcare, help around the home. Added to the Life & TPD ongoing need.
$
Income your partner would keep earning — it offsets the need.
The recovery bridge trauma cover funds — 2 years is the usual convention.
$
$
Assets you'd realistically sell or use
$
$
Existing cover
$
$
$
$
Since October 2021, new income protection policies pay at most 90% of your income for the first 6 months of a claim and 70% after that, based on your income at the time you claim (not when you applied). Insurers also apply lower percentages to higher incomes (typically above $150,000) and monthly caps.
Your partner
$
Defaults to 75% of household income — edit to suit.
$
If this person died or was disabled, what would it cost to replace the care and household work they provide — nannies, childcare, help around the home. Added to the Life & TPD ongoing need.
$
Income the other of you would keep earning — it offsets the need.
The recovery bridge trauma cover funds — 2 years is the usual convention.
$
$
Assets you'd realistically sell or use
$
$
Existing cover
$
$
$
$
Since October 2021, new income protection policies pay at most 90% of your income for the first 6 months of a claim and 70% after that, based on your income at the time you claim (not when you applied). Insurers also apply lower percentages to higher incomes (typically above $150,000) and monthly caps.
Enter incomes, dates of birth and your debts above to see the cover each of you needs.
Small changes to the assumptions (return, inflation, years) can make a big difference to these figures — try adjusting them. The estimated amounts may also not be available to you as cover: age, occupation, underwriting and insurer caps apply. As a sanity check (not advice): published industry modelling (Rice Warner) suggests a mid-30s couple with two young children on average earnings typically needs roughly $750k life / $670k TPD / $4,500 a month income protection.
Assumptions & method (how the numbers are built)
Present-value method. Ongoing amounts are capitalised as the present value of an inflation-indexed annual amount over the funding period, discounted at the real (net) rate r = (1 + return) ÷ (1 + inflation) − 1: PV = X × (1 − (1 + r)−N) ÷ r (or X × N when the return equals inflation). This is consistent with professional planning-software assumptions, where insurance proceeds are assumed to be invested and drawn down over the funding period. In the year-by-year funding tables, indexed amounts are drawn at the end of each year — the same timing the formula assumes, so the two reconcile to the dollar.
Funding period. Defaults to the beneficiary's life expectancy, rounded to the nearest whole year — for a couple, the surviving partner's; for a single person, your own life expectancy is used as a proxy for your estate and dependants. Life expectancy comes from the Australian Life Tables 2020–22 (Australian Government Actuary); ages under 31 use the age-31 row. You can edit the number of years.
Investment return default: 4.2% p.a. — a conservative beneficiary investment profile, consistent with professional planning-software assumptions (a surviving partner typically invests defensively). Editable.
Indexation. The ongoing need and continuing income are indexed at your inflation assumption (default 2.5% p.a.). Professional planning software often defaults indexation of costs to 0%; indexing the need is the more conservative choice — it produces a higher recommended cover.
Ongoing need default. 75% of gross household income — a common planning convention for maintaining the household's standard of living. Fully editable.
Home duties & childcare. The replacement cost you enter for a person's unpaid care and household work is added to the ongoing need for their Life and TPD calculations — so cover for a non-earning parent is properly costed, not ignored.
Continuing income offset. The surviving/continuing partner's income is valued as a present value over the same funding period and counted as capital available — so you only insure the true gap. For trauma it is offset over the recovery window.
Trauma convention. Trauma cover is sized as a recovery bridge — the ongoing need for the recovery years you set (default 2, undiscounted) plus the medical/recovery allowance and any buffer — not lifetime capital, so no year-by-year funding table is shown for it.
Offsets. Super is counted as capital available for Life and TPD only (it is generally not accessible on a trauma event). Liquid/disposable assets and continuing income offset all three lump-sum covers.
Gross up for super tax: not applied. Tax on TPD or death benefits paid through super (and any need to gross up cover held in super) is not modelled — consistent with professional planning-software defaults; we confirm ownership structure and tax with your adviser.
Income protection. Target benefit is 70% of gross income, shown monthly — the maximum new policies pay after the first six months of a claim under the rules that took effect in October 2021 (up to 90% applies for the first six months). Benefits are based on your income at the time of claim; insurers apply lower percentages to higher incomes and monthly caps, so the exact insurable amount is confirmed at quote stage.
Education. The per-child allowance is a simple (undiscounted) total added to Life and TPD needs and cleared at claim.
The estimate is produced by a fixed calculation from a limited set of inputs. It is not a recommendation that any amount of insurance is suitable or sufficient for you, and the estimated amounts may not be available to you as cover — age, occupation, underwriting and insurer caps apply. All figures are in today's dollars; premium affordability, policy definitions and ownership (super vs personal) are not modelled.
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Cover amounts are only half the story — ownership (super vs personal), premium structure and policy definitions matter just as much.
This analysis capitalises your household's future needs in today's dollars: ongoing living costs and the continuing partner's income are valued as present values of inflation-indexed amounts over the funding period (default: the beneficiary's life expectancy per the Australian Life Tables 2020–22), discounted at the real rate implied by your return and inflation assumptions. Life and TPD needs add debts, education, home duties replacement, one-off provisions and (for TPD) medical and home-modification allowances, less super and realisable assets; trauma is sized as a recovery bridge over the years you set. Income protection targets 70% of gross income (the long-term maximum for new policies since October 2021; up to 90% applies for the first six months of a claim). It excludes premiums, policy terms and definitions, tax on benefits paid through super, waiting and benefit periods, and individual circumstances. The estimate is a fixed calculation from a limited set of inputs — not a recommendation that any amount of insurance is suitable or sufficient for you — and the estimated amounts may not be available to you as cover (age, occupation, underwriting and insurer caps apply). General information only — not personal advice. We confirm exact needs and recommendations through your adviser. Navarino Wealth Pty Ltd.
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