How much life Insurance do I need?

In NobleOak’s recent Life Insurance Pulse Report* conducted with over 1,000 Australians, participants were asked if they have less life insurance cover than they think they need (i.e. under-insured), the correct amount, or more cover than they think they need (i.e. over-insured).

Most of those who have life insurance feel like they have the correct amount of cover or more than they need including 77% of those who hold their life insurance cover in their superannuation.

Only 18% of participants think they have less cover than they need (i.e. they’re under-insured), however this does increase to 23% for those who hold life insurance through super suggesting there is some sentiment that the cover offered through super may not be enough for their individual circumstances.

You cannot exactly predict how much life insurance you might need for you and your loved ones. But you can narrow the figure down by looking at your objectives, financial situation (such as current assets and debts) and needs.

Here are some considerations when it comes to planning your life insurance.

• What are your family’s regular living costs? Do you have any plans to reduce or expand them in the future?
• Do you have personal savings? What assets do you have available?
• What is the balance of your loans and credit cards? Do you have a mortgage and how much do you owe on it? Do you have other debts and how long would it take to pay them off?
• What would your family’s income look like after your death? Are there other sources of income they could count on?

Once you answer these questions as accurately as you can, you will have a clearer picture on what is right for you.

Other factors you may want to take into consideration are your life circumstances. For example, if you have small children or are planning to have kids in the future, you may wish to include the costs for their education. Or if you have a partner, you might also wish to consider a retirement fund for them.

Utilising NobleOak’s life insurance calculator could be a good starting point to help you calculate what life insurance cover you may need.  The calculator helps determine the amount of cover you and your family may need in 5 steps. The assessment includes all Life Insurance covers including life insurance, income protection, total and permanent disability insurance, and trauma insurance. You’ll be provided a free report which will provide you with levels of insurance cover you may wish to consider based on the information entered by you into the tool.

*Research conducted on behalf of NobleOak by The Market Intelligence Co, December 2023 with over 1,000 Australian citizens or residents.

Disclaimer: This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs. Please do not use this information as a substitute for getting a proper quote and deeper assessment of your choices. The websites and tools mentioned provide general information only. Please ensure you read and understand the terms and conditions for each site