Life insurance pays a lump sum to your nominated beneficiaries (usually spouse and children) if you die. The right amount of cover is a function of what would be left financially behind: outstanding debts (mortgage, personal loans, credit cards), final expenses (funeral, estate administration), the income you'd have brought in for any dependants over their remaining years of dependency, and the money it'd take to put surviving children through school and to independence.

The most common framework is DIME — Debt + Income + Mortgage + Education. The maths add up the lump-sum equivalent of each, then subtract anything you've already got (existing cover, savings, super death benefit). What remains is the gap. This calculator implements DIME with editable inputs for each component. Most Australian households end up needing somewhere between 5x and 12x annual income in cover, with the spread driven mostly by mortgage size and number of dependent children.

Life cover via super is the most common starting point — most APRA-regulated funds include default cover that's affordable but often too low (typical default cover is around $100,000-$300,000, well below the typical Australian family need). Top up with retail life cover if there's a gap, taking advantage of the tax-deductible-via-super pathway where it makes sense (premiums paid pre-tax inside super reduce assessable income, but the lump sum paid to non-dependants is taxed at 17%, so the structure isn't always optimal).

For income-replacement insurance for non-fatal incapacity, see our Income Protection Calculator. For permanent-disability cover, see our TPD Insurance Calculator.