Life insurance matters most for people whose death would create financial hardship for someone else. That includes anyone with dependants, anyone carrying significant debt, and business owners whose entity depends on them.
The question is not whether you personally want a payout (you will not see it), but whether anyone relying on your income, your debt servicing, or your business stake would face a shortfall after your death.
Common scenarios where life cover is typically considered
- Parents with dependent children: income to replace, school fees, mortgage, ongoing household costs.
- Couples with shared debt: jointly owned mortgage, vehicle loans, or guarantor commitments where one income would not cover servicing.
- Single-income households: one earner supporting a partner, parents, or extended family.
- Business owners and partners: key person cover for the business and buy/sell cover for ownership succession.
- Self-employed and contractors: no employer-provided cover, no group salary continuance default.
- People with elderly parents or financially dependent siblings: where the deceased's contribution is the household's safety net.
- People near retirement with debts still outstanding: mortgage balance, investment property leverage, business loans.
Where life cover is less critical
- Single people with no dependants and no debt: the financial-hardship test is not met. Funeral cover (a small lump sum to cover final expenses) may suffice.
- Retirees with paid-off mortgages, grown children, and adequate retirement savings: the income-replacement need is gone. Final-expense cover may be enough.
- High-net-worth individuals whose estate could absorb any debt: liquidity is the question, not need.
Sum insured: what to think about
The panel does not impose a personal-circumstances formula. Common considerations adviser conversations cover:
- Outstanding mortgage balance
- Other debts (vehicle loans, business loans, personal loans, credit cards)
- Years of income replacement required (commonly 5 to 15 years depending on dependant ages)
- Children's future education costs
- Funeral and immediate expenses (commonly $10,000 to $25,000)
- Less: existing savings, super death benefits, and any group cover already in place
The outcome is illustrative, not personal advice. The Life Insurance Act and the Insurance Contracts Act do not specify a sum-insured formula; insurers apply financial underwriting at application to confirm the sum insured is justifiable against your income, debts, and household responsibilities.
Panel sum insured limits
- AIA Priority Protection PDS (Version 32, 9 November 2025), Section 2.1.1: no stated maximum; subject to financial underwriting.
- Zurich Wealth Protection PDS (1 November 2025), adviser guide: subject to individual assessment.
- TAL Accelerated Protection PDS (12 December 2024), adviser guide: any financially justifiable amount.
- OnePath OneCare PDS (1 October 2025), adviser guide: subject to individual circumstances.
- ClearView ClearChoice PDS (13 May 2024, update 5 June 2025): subject to financial underwriting.
- NEOS Protection PDS (6 December 2024), adviser guide: $5,000,000 cap at commencement and over the life of the plan.
- Encompass Protection PDS (26 September 2025), Section 1 Life Cover: $7,000,000 maximum.
- Acenda Insurance PDS (27 September 2025): no general maximum; special terms apply above $15 million.
- Futura Protection PDS (1 October 2025), adviser guide: $15,000,000 maximum.
When to review your cover
Life events that typically prompt a review:
- Marriage or de facto relationship change
- Birth or adoption of a child
- Property purchase or significant refinance
- Career change with material income change
- Business ownership change (founding, partnership, exit)
- Children becoming financially independent
- Final mortgage payoff
- Approaching retirement
Several panel insurers offer a Future Insurability or Future Increase Benefit that lets you raise the sum insured at specified life events without further medical evidence, typically up to age 55.
Regulator anchor
The brokerage provides general advice only. ASIC's MoneySmart at moneysmart.gov.au has consumer-level guidance on how to think about life cover needs. Your specific circumstances may warrant personal advice from a licensed financial adviser who can prepare a Statement of Advice. The information above is illustrative and based on the Life Insurance Act 1995 and Insurance Contracts Act 1984 framework that applies to all 9 panel insurers.