How much life insurance do I need?

How much life insurance you might need will depend on your personal circumstances, financial situation, and your reasons for taking out life insurance in the first place.

What type of life insurance should I apply for?

As a starting point, you might want to consider the different life insurance covers that are available to you. Different life insurance covers are designed to help protect you from different circumstances. Some of the covers available include:

  • Life cover – which provides a lump sum payment if you pass away, or if you’re diagnosed with a terminal illness. The amount of cover you can choose depends on your age, income and your eligibility at time of application.   
  • Total and permanent disability (TPD) – which provides a lump sum payment if you have an accident or specific medical condition that means you’re permanently unable to work. It’s sometimes called permanently unable to work cover.
  • Trauma/critical illness cover – which provides a lump sum payment if you suffer a specified condition like cancer (excludes early stage cancers), a stroke, or a severe heart attack.
  • Funeral insurance – which provides a lump sum payment if you pass away, and it can be used to help your family cover the cost of funeral arrangements and other final expenses.
Wife and husband checking life insurance cover on their laptop

It’s important to remember that different types of insurances may have specific terms, conditions, exclusions and waiting periods. So, make sure you read the Product Disclosure Statements (PDS) carefully to help you decide which product is right for you.

What factors should I consider when choosing a cover amount?

Everyone’s circumstances are different, so you’ll need to consider your personal situation and financial goals when deciding on a cover amount.

Some factors you might want to consider include:

  • your total household income
  • any savings or other cash holdings
  • any financial assets, such as a property or mortgage
  • how much you pay each month for rent or your mortgage
  • how much you spend per month on other living expenses, like groceries and bills
  • future expenses, such as getting a new car or taking a holiday
  • if you have any debts
  • your relationship status
  • if you have any children or dependents, or plan to
  • your partner’s earning potential, including whether they would be eligible for government payments.

How do I calculate how much life insurance I need?

Our life insurance calculator can help you work out how much insurance you might need. If you’re not sure, speak to a financial advisor or other qualified professional.

How much life insurance can I apply for? 

The amount of life insurance you can take out will depend on your personal circumstances and the type of cover you decide to apply for. Some of the personal factors that might affect how much cover you can apply for include:

  • your age
  • your occupation
  • any pre-existing medical conditions
  • any dangerous hobbies or activities that you’re involved in, such as extreme sports.

Many life insurance policies will also have a maximum amount of cover. This is called the maximum-sum insured.

Not sure how much life cover you need?

Answer a few questions and we'll help you work out the amount of life insurance cover you might want. Try the Medibank Life Insurance Calculator. 

Still have questions?

Get in touch. Whether you want to look after your family, or cover yourself for what may come your way, our consultants are available to answer your questions about Medibank Life Insurance, to help you get a quote or take out a policy. Call us on 1300 766 085 between 8:00 am and 8:00 pm (AEST) Monday to Friday.

Things you should know

* This information is based on current tax laws. This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.

^ 24/7 Medibank Nurse Phone Service is offered by Medibank Health Solutions Pty Ltd who reserve the right to withdraw or change the service at its sole discretion.

Any advice provided is general only and doesn’t consider your objectives, financial situation or needs. You should carefully read the relevant Product Disclosure Statement (which sets out the product terms, conditions and exclusions), Target Market Determination and Financial Services Guide available here to ensure the product is right for you. Medibank life insurance products are issued by the insurer, Swiss Re Life & Health Australia Limited ABN 74 000 218 306, AFSL 324908 (Swiss Re). Medibank life insurance products are distributed by Greenstone Financial Services Pty Ltd ABN 53 128 692 884, AFSL 343079 (GFS), and promoted by Medibank Private Limited ABN 47 080 890 259, AR 286089 (Medibank Private). Medibank Private is an authorised representative of GFS.

For more information about how Medibank handles your personal information see our Privacy Policy. The Privacy Collection Notice provides more information about our partner’s privacy practices and policy.

Have questions?

Our team of experts are ready to help!

Enter your postcode to find your nearest store to have a face-to-face chat!

Fill in the form below or get in touch by calling our dedicated line 1300 110 086.
We are open on Sundays.

In providing your telephone number, you consent to Medibank contacting you about health insurance.

We'll have someone call you soon to help with any questions you have.

contact us