How much life insurance cover do I need?

There is no universal number. The illustrative starting framework is the total of debts to clear, replacement income for dependants, and final expenses, less existing assets and any super-held cover. That gives a baseline. Personal circumstances refine it.

This answer is general advice only. ASIC's MoneySmart calculators (moneysmart.gov.au) walk through the same framework. Each panel insurer applies its own financial-underwriting limits on top of the sum you can apply for, and two panel insurers impose stated dollar maximums.

The standard framework

Work through these four categories. They are illustrative inputs, not personalised recommendations.

1. Debts to clear: mortgage balance, personal loans, credit cards, business loans, HECS / HELP balances where relevant.
2. Replacement income for dependants: years of household income needed (commonly to youngest dependant's age 18 or 21), multiplied by the current household income, less expected partner income.
3. Lump-sum costs: funeral expenses, estate-administration costs, future education funding (private school, tertiary), any specific bequests.
4. Less existing offsets: liquid savings, super balance accessible to dependants, existing life cover held inside super or another retail policy.

The net figure becomes the indicative sum insured. Many households land between 7 and 12 times annual income on a single life cover, though the right number for any individual depends on the four categories above.

What each panel insurer will issue

All 9 panel insurers underwrite Life Cover subject to financial justification. A few impose stated dollar caps; most do not.

| Insurer | Stated maximum sum insured | |---|---| | AIA | No stated maximum; subject to financial underwriting | | Zurich | Subject to individual assessment; $15M cap for business-event automatic increase | | TAL | Any financially justifiable amount | | OnePath | Subject to individual circumstances | | ClearView | Subject to financial underwriting | | NEOS | $5,000,000 at commencement and over the life of the plan | | Encompass | $7,000,000 | | Acenda | No general maximum; special terms apply over $15M | | Futura | $15,000,000 |

Sources: AIA Priority Protection PDS (Version 32, 9 November 2025), Section 2.1.1; Zurich Wealth Protection PDS (1 November 2025); TAL Accelerated Protection PDS (12 December 2024), Section 2.1; OnePath OneCare PDS (1 October 2025); ClearView ClearChoice PDS (13 May 2024, update 5 June 2025); NEOS Protection PDS (6 December 2024); Encompass Protection PDS (26 September 2025), Section 1; Acenda Insurance PDS (27 September 2025); Futura Protection PDS (1 October 2025).

Why financial underwriting matters

Even on insurers with no stated cap, the insurer will ask for evidence at higher sums insured. Common evidence requests for cover above $1M to $1.5M include 2 years of personal tax returns, accountant-prepared business financials for self-employed applicants, and a financial-needs analysis worksheet. The insurer's underwriter forms a view on whether the requested sum is reasonable relative to your income, debts, and dependant structure.

Indexation keeps the cover real

Most panel PDSs apply automatic indexation each policy anniversary, typically the higher of CPI or a stated floor (5% on AIA, NEOS, TAL, Futura; 3% on Encompass; CPI-only on Zurich and ClearView; variable on Acenda). The sum insured rises each year and the premium adjusts proportionately. The mechanism is documented in AIA Priority Protection PDS Section 7.2; Encompass Protection PDS Indexation Benefit section; NEOS Protection PDS Indexation section; and the equivalent sections of the other panel PDSs.

Common considerations

• Major life events (marriage, child, new mortgage, partnership change) shift the right sum insured. Re-run the four-category check at each event.
• Future Insurability Benefit on most panel PDSs lets you increase the sum insured at qualifying events without re-underwriting, up to stated caps.
• Existing super-held cover counts as an offset. Check your latest super statement.
• Income-only multiples (10x income, 15x income) are rough shorthand; the four-category framework gives a tighter answer.

The AFCA dispute pathway and APRA prudential standards govern the contract once the sum insured is set. A licensed adviser working under general advice can model the panel quotes side-by-side for your specific structure.