Personal Insurance Needs Calculator
Wealth & Security Planners
Comprehensive Capital Needs Analysis for Australian Families
October 2025
⚠ Important Disclaimer
This calculator is provided for educational and illustrative purposes only.
This tool demonstrates methodologies commonly used in the insurance industry to estimate insurance needs using Capital Needs Analysis. The calculations and results provided:
- Do NOT constitute personal financial advice and should not be relied upon as such
- Are general in nature and do not consider your individual circumstances, financial situation, or needs
- Should not be used as the sole basis for making insurance decisions
- May not be appropriate for your particular situation
Before making any insurance decisions, you should:
- Obtain personal financial advice from a qualified and licensed financial adviser who can assess your individual circumstances
- Review relevant Product Disclosure Statements (PDS) and Target Market Determinations (TMD)
- Consider seeking legal, tax, and other professional advice as appropriate
Limitation of Liability: Wealth & Security Planners and its associates make no warranties or representations about the accuracy, completeness, or suitability of the information provided by this calculator. Use of this tool is at your own risk. To the fullest extent permitted by law, we disclaim all liability for any loss or damage arising from reliance on this calculator.
For personal financial advice tailored to your circumstances, please contact Wealth & Security Planners or another licensed financial adviser.
About Death/Life Insurance
Death insurance replaces your lifetime economic value to dependents using 50% income replacement and full debt clearance. This calculation uses Capital Needs Analysis methodology endorsed by ASIC RG 90.
⚖ Estate Planning Documentation Check
Critical: Ensure the following estate planning documents are in place and align with insurance calculations:
“ Valid Will: All bequests and assumptions in this calculator should align with the terms and clauses of the client's most recent Will. If no Will exists, clarify that insurance policy ownership and beneficiary nominations are ESSENTIAL elements of insurance planning, as intestacy rules may not reflect the client's wishes.
“ Policy Ownership: Confirm who owns the policy (individual, superannuation fund, business) as this determines who receives the benefit and tax implications.
“ Beneficiary Nominations: Verify that binding or non-binding death benefit nominations are current and reflect client intentions.
1. Final Costs
2. Debt Clearance
3. Income Replacement (50% for Death)
4. Children's Education Costs
5. Bequests & Gifts
6. Asset Offsets ✓ Asset values should be net of all selling costs, CGT, and the 17% tax on super death benefits to adult non-dependents
7. Existing Insurance
Understanding Your Death Cover Calculation
- Debt Clearance: This calculation assumes ALL debts listed will be cleared. If you intend to retain some debts (e.g., investment property loans that are positively geared), simply don't include those debts in the figures above. Any debt not listed here is assumed to continue.
- 50% Income Replacement: Death cover uses 50% (not 100%) of income because debt elimination significantly reduces ongoing expenses, plus one less person in the household further reduces living costs. This is consistent with ASIC RG 90 and industry best practice.
- Bequests Must Align with Will: All charitable donations and specific bequests entered in Section 5 should align exactly with the terms in the client's current Will. If there is no Will, these amounts should be considered as intended wishes that require proper estate planning documentation to be honoured.
- Asset Offsets - Tax & CGT Considerations: Remember to account for all costs when valuing assets:
- Superannuation: 17% tax applies to taxable component for adult non-dependent children. Enter the net after-tax amount.
- Investment Properties: Deduct 3-5% selling costs AND capital gains tax liability if applicable.
- Shares: Consider CGT liability on disposal and enter net value.
- Business Value: Use orderly liquidation value, not forced sale value.
- Present Value (PV): Income replacement is shown as PV - the lump sum needed today to provide the specified annual income over the specified years, accounting for inflation and investment returns.
- Insurance Ownership Matters: Policy ownership (individual, super fund, family trust) determines beneficiary and tax treatment. Ensure ownership structure aligns with estate planning objectives.
About Total & Permanent Disability (TPD) Insurance
TPD insurance provides comprehensive support for permanent disability including home modifications, ongoing care, and 100% income replacement. TPD cover typically EXCEEDS death cover due to ongoing living expenses plus care needs.
⚖ Estate Planning & Guardianship Documentation Check
Critical: Ensure the following legal documents are in place for TPD scenarios:
“ Enduring Power of Guardianship (Western Australia): Under the Guardianship and Administration Act 1990 (WA), this document appoints someone to make lifestyle, healthcare, and accommodation decisions if you lose mental capacity. Essential for TPD claims where cognitive impairment is involved.
“ Enduring Power of Attorney (EPA): Appoints someone to manage financial and legal affairs. Critical for accessing TPD benefits and managing investments, property, and ongoing expenses.
“ Advanced Health Directive: Documents your wishes for medical treatment in case you cannot communicate them yourself.
“ Policy Ownership & Superannuation Access: Confirm whether TPD insurance is held in personal name or within superannuation. Super-held TPD requires meeting the fund's specific TPD definition (which may differ from the insurance policy definition) to access benefits.
1. Home & Vehicle Modifications
2. Medical & Rehabilitation Costs
3. Debt Clearance
4. Income Replacement (100% for TPD)
5. Education Costs
6. Ongoing Care Costs
7. Asset Offsets
8. Existing TPD Insurance
Understanding Your TPD Cover Calculation
- 100% Income Replacement: TPD uses 100% (not 50%) of income because the person remains alive with full ongoing expenses, PLUS additional costs for care and modifications. This is fundamentally different from death cover.
- Why TPD Typically Exceeds Death Cover: TPD cover generally exceeds death cover by 30-50% due to home modifications (~$175k), ongoing care costs ($50k+ annually), and the person continuing to live with full household expenses.
- Policy Definitions Are Critical:
- "Any Occupation" TPD: More restrictive - you must be unable to work in ANY occupation suited to your education, training, or experience. Harder to claim but typically cheaper.
- "Own Occupation" TPD: More protective - you must be unable to work in your own specific occupation. Easier to claim but more expensive. Strongly recommended for professionals and specialists.
- Superannuation vs Personal TPD: Only include superannuation in Asset Offsets if you're confident the client meets the TPD definition specified in their superannuation fund rules, which may differ from the insurance policy definition. Many clients are surprised to learn their super TPD definition is more restrictive.
- Enduring Power of Guardianship Essential: In Western Australia, an Enduring Power of Guardianship (under the Guardianship and Administration Act 1990) is crucial for TPD scenarios, particularly where cognitive capacity is affected. Without this, family may need to apply to the State Administrative Tribunal (SAT) for guardianship orders.
- Ongoing Care Costs: Full-time care typically costs $50,000+ per year. Part-time care varies based on needs. The calculator uses present value to determine the lump sum needed today to fund future care expenses.
About Trauma/Critical Illness Insurance
Trauma insurance bridges the recovery gap (typically 6-12 months). It covers treatment costs, mortgage payments during recovery, and living expenses. Based on Dr. Marius Barnard's philosophy: "I can repair a man physically, but only insurers can repair a patient's finances."
⚖ Estate Planning & Power of Attorney Documentation Check
Important: Trauma events often involve temporary incapacity. Ensure the following documents are in place:
“ Enduring Power of Attorney (EPA): Critical for trauma scenarios where you may be temporarily unable to manage financial affairs during recovery (e.g., heart attack, stroke, major surgery). Your appointed attorney can access trauma benefits, pay bills, and manage investments.
“ Enduring Power of Guardianship: May be needed if trauma event affects decision-making capacity, even temporarily. Allows appointed guardian to make healthcare and lifestyle decisions during recovery.
“ Will Review: While trauma cover is for recovery (not death), a critical illness is a timely reminder to ensure Will is current and reflects your wishes.
“ Policy Ownership: Confirm who owns the trauma policy and whether benefits are payable to individual, estate, or can be assigned. Ownership structure affects benefit accessibility during recovery.
1. Medical Out-of-Pocket Costs
2. Debt Servicing (2 Years Recommended) ⚠ Australian industry standard: 2 years of debt servicing, not full clearance. This prevents foreclosure during recovery.
3. Income Replacement (6-12 months)
4. Recovery & Support Costs
5. Existing Trauma Insurance
Understanding Your Trauma Cover Calculation
- 2 Years Debt Servicing (NOT Full Clearance): Australian industry standard recommends 2 years of debt payments, not full debt elimination. This approach:
- Prevents foreclosure during recovery period
- Is more affordable than full debt clearance
- Recognizes most trauma recoveries allow return to work within 12-24 months
- Recovery Gap Bridge: Trauma cover is specifically designed to bridge the typical 6-12 month recovery period before:
- Income Protection insurance begins payments (usually 30, 60, or 90 day waiting period)
- Return to work (full or partial capacity)
- Other income sources resume
- Trauma vs TPD - Not Duplicates: These are complementary covers, not duplicates:
- Trauma: For critical illness with expected recovery (heart attack, stroke, cancer). Provides immediate lump sum for treatment and recovery period.
- TPD: For permanent disability where you cannot work again. Provides larger lump sum for lifetime needs.
- Dr. Marius Barnard's Philosophy: "I can repair a man physically, but only insurers can repair a patient's finances." Trauma insurance was invented by Dr. Barnard (brother of heart transplant pioneer Christiaan Barnard) after seeing patients survive surgery but lose their homes and businesses during recovery.
- Policy Definitions & Conditions: Check policy for:
- List of covered conditions (typically 30-50 conditions)
- Survival periods (often must survive 14-30 days post-diagnosis)
- Definition severity thresholds (e.g., what constitutes "major" heart attack or stroke)
Insurance Needs Summary
About This Summary
This summary compares your insurance needs across all types. Calculate each insurance type first to see your complete profile.
Death Cover
Protects dependents' future
TPD Cover
Comprehensive disability support
Trauma Cover
Recovery period support
Important Notes
- This calculator provides estimates based on Capital Needs Analysis methodology
- Actual insurance needs may vary based on individual circumstances
- Consider tax implications, especially for superannuation death benefits (17% tax to adult non-dependent children)
- Review insurance annually or when circumstances change significantly
- TPD definitions vary - "Any occupation" vs "Own occupation" makes a significant difference
- This tool is for educational purposes - consult with a qualified financial adviser for personal advice
Perth-Specific Benchmarks Used
Funeral Costs
Perth average: $15,000-$20,000
Private Education
Perth: ~$300,000 for 13 years per child (most affordable among Australian capitals)
Childcare
Perth: ~$140/day, translating to $32,000-$45,000 annually
Home Modifications
Standard TPD modifications: $175,000 total