Should I get life insurance through super or separately?

Through super: cheaper (paid from pre-tax dollars), convenient, but may have restrictions on cover type and amount. Separate policy: more flexibility, broader definitions, but premiums are from after-tax income. Many people use a combination — base cover through super and a top-up separately. Compare both options.

What's the difference between stepped and level premiums?

Stepped premiums increase each year as you age — cheap at 30 but expensive at 50+. Level premiums are locked in at your age of entry — more expensive initially but save money long-term. If you plan to hold cover for 15+ years, level premiums usually work out cheaper overall.

Can I get life insurance if I have a pre-existing condition?

Yes, but premiums may be higher, or the condition may be excluded. Common conditions like high blood pressure, diabetes, or mental health history don't automatically disqualify you. Each insurer assesses differently — a broker can help find the best option. Getting cover while healthy is always better.

Life Insurance Calculator

Calculator

Calculate how much life insurance cover you need based on your income, debts, dependants, and financial goals. Get a personalised cover recommendation.

Free to useNo data storedAI insightsUpdated: February 2026

How much life insurance do you need? It's not just about replacing your income — it's about ensuring your family can pay off the mortgage, cover education costs, and maintain their lifestyle without financial stress. Many Australians are significantly underinsured — the average gap is over $300,000 according to Rice Warner research. Your super fund probably includes some life cover, but it's often nowhere near enough. This calculator helps you determine the right amount of cover based on your actual financial situation.

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Real-World Examples

Young Family, Mortgage

Sarah, 35, earns $110,000. Mortgage: $500,000. Two kids (ages 3 and 5). Wants 15 years of income replacement and $50,000 education fund per child. Has $200,000 default cover in super.

Income replacement: $110,000 × 15 = $1,650,000. Mortgage: $500,000. Education: 2 × $50,000 = $100,000. Funeral: $15,000. Total need: $2,265,000. Less existing cover: $200,000. Additional cover needed: $2,065,000. Estimated premium: ~$120-$180/month (outside super) or ~$100-$150/month (through super).

Single, No Dependants

Tom, 28, single, no kids. Rents. Has $20,000 in savings and minimal debt.

With no dependants, Tom's life insurance need is minimal — funeral costs ($15,000) and any debts. However, getting cover NOW while young and healthy locks in excellent rates. If Tom plans to have a family later, getting a policy now is smart — it's much cheaper at 28 than at 38, especially if health changes.

Frequently Asked Questions

Glossary

Life Insurance (Death Cover)

Pays a lump sum to your beneficiaries when you die. Used to replace income, pay off debts, and fund future goals like children's education.

Sum Insured

The total amount of cover (lump sum) that will be paid out. This is what you're calculating — how much cover you need.

Stepped Premiums

Premiums that increase each year based on your age. Start cheap but become expensive over time.

Level Premiums

Premiums that are fixed at your age of entry and don't increase with age (though they may be adjusted for CPI or insurer changes). More expensive initially but cheaper long-term.

Related Tools

Income Protection Calculator

Protect your income if you're injured or ill (covers living expenses, not just death).

TPD Insurance Calculator

Calculate Total & Permanent Disability cover if you can never work again.

Super Balance Calculator

Check if your super includes adequate default insurance cover.

How to Use

1Enter your annual income and how many years your family would need it replaced.
2Add your total debts (mortgage, loans, credit cards).
3Select the number of dependants.
4Optionally add education funding goals per child.
5Enter any existing life cover (check your super statement!).
6See your recommended cover amount and estimated premiums.

Key Information

The average Australian is underinsured by $300,000+ (Rice Warner).
Most super funds include default life cover — but typically only $100,000-300,000.
Life insurance premiums are based on age, gender, smoking status, health, and occupation.
Cover through super is cheaper (premiums from pre-tax dollars) but may have limitations.

Pro Tips

Check your super statement — you probably have some life cover you don't know about.
Holding life insurance through super means premiums are paid from pre-tax money (effectively 15% tax rate), making it cheaper.
Review your cover every major life event: marriage, kids, new mortgage, divorce, or pay rise.
Stepped premiums start cheaper but increase with age. Level premiums cost more initially but stay flat. Level is better if you plan to hold cover long-term.

Avoid These Mistakes

Only insuring one partner — if one parent stays home and provides childcare, that has significant economic value ($40,000-$80,000/year).
Relying solely on super fund cover — default cover is rarely enough for a family with a mortgage.
Not reviewing cover after major life changes — your needs at 25 are very different from 40.
Cancelling cover to save money without understanding the consequences — you may not qualify again if your health changes.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026