Life & TPD Insurance Coverage Calculator

What is Life & TPD Insurance Coverage?

Estimates how much Life, TPD (Total & Permanent Disability), Income Protection, and Trauma cover you need based on either the DIME method (Debt + Income + Mortgage + Education) or the more detailed needs-based method. Subtracts existing cover and liquid assets to show your insurance gap.

How this calculator works

Choose DIME or needs-based method. Enter your annual income, debts, mortgage, education costs, and (for needs-based) monthly living expenses and months to cover. Enter existing life cover (including default super cover) and liquid assets. The calculator outputs total Life cover needed, your gap, plus suggested TPD (Life × 1.2), Income Protection (75% of pre-tax income/12), and Trauma cover (1× annual income).

DIME Method Explained

DIME = Debt + Income + Mortgage + Education. Add: (D) all consumer debts to clear, (I) annual income × years to replace (typically 7–15 years until kids are independent or partner can re-skill), (M) full mortgage payoff so the family home is secure, (E) future children's education — public ~$15k–$30k per child total, private day school ~$200k+, boarding ~$400k+. The total is your life-cover need.

Cover Through Super vs Retail

SUPER ADVANTAGES: cheaper group rates (no medicals up to default amounts), premiums come from your super balance not take-home pay, automatic for most workers. DISADVANTAGES: lower default amounts (often only $100–$200k), TPD limited to 'any occupation' definition, premiums erode retirement savings over time, can't always upgrade to higher cover without underwriting. Most Australians are under-insured through super defaults — by ASIC estimates, 80% of working-age adults have less life cover than they need.

Own Occupation vs Any Occupation TPD

OWN OCCUPATION: pays out if you can't return to YOUR specific job (e.g. surgeon who loses fine motor control). ANY OCCUPATION: only pays if you can't return to ANY job suited to your training/experience — much higher bar. Since 1 July 2014, 'own occupation' is only available outside super. Industry research suggests ~70% of TPD claims succeed under own occupation vs ~50% under any occupation. Worth the extra premium for white-collar professionals.

Income Protection Specifics

ASIC capped IP at 70–75% of pre-tax income from October 2021 (previously up to 85%). Key choices: WAITING PERIOD (30/60/90 days — longer = cheaper but you need savings to bridge), BENEFIT PERIOD (2 years, 5 years, or to age 65 — longer = much more expensive), AGREED VALUE vs INDEMNITY (agreed value pays the figure on the policy regardless of income at claim time; indemnity pays based on income at claim, less common since 2021). Stepped premiums rise each year; level premiums stay flat — level becomes cheaper after ~7–10 years if you keep the policy.

Trauma (Critical Illness) Cover

Lump sum payable on diagnosis of a defined critical illness — typically cancer (excluding very early-stage), heart attack, stroke, kidney failure, major organ transplant, multiple sclerosis, etc. Different from TPD (which requires inability to work) and from Life (which requires death). Useful to fund out-of-pocket medical costs, modify home/car for recovery, pay off debt, or take time off work for treatment without depleting savings.

Updated for the 2025-26 financial year (1 July 2025 to 30 June 2026).

All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.

Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.