About the Lifebroker Calculator
Purpose of this calculator
The purpose of this calculator is to provide you with a reasonable estimate of the life insurance cover amounts that you may want to consider when purchasing insurance.
This calculator cannot take into consideration all of your personal circumstances and situation and should be not be relied on when making a decision for your insurance purchase. You may want to seek further professional financial advice before deciding what cover amounts and which products to purchase. It is also important to read the Product Disclosure Statement for the relevant insurance product before proceeding with your purchase to ensure the product is suited to your circumstances, needs, objectives and requirements.
The calculator will provide you with estimated cover amounts for Life, Total and Permanent Disability (TPD) and Trauma insurance products based on the information supplied by you, and you can change these cover amounts or product type, before comparing different insurance products.
After purchasing a life insurance product, you may also want to review your cover as your life circumstances change, for example if you family grows, you buy a new home or you get married, to ensure that you and your family have adequate cover should the unexpected occur.
Methodology used in this calculator
The calculator uses the following methods and assumptions in calculating the estimated amounts of cover for Life, TPD and Trauma insurance.
Life Cover and Total and Permanent Disability (TPD) Cover
When calculating Life and TPD cover amounts, the following methods are used:
- Your income: Either the upper range of the income amount you have selected, or the income amount you have manually entered is used, and 50% of such income amount for three years will be added to increase the Life and TPD cover amounts. This is done to help ease the effect of losing your contribution to the total household income for the first three years after you pass away or become permanently disabled. When reviewing the cover amounts provided, you may also want to consider an Income Protection insurance product, in addition to Life and TPD cover.
- Your mortgage: Either the upper range of the amount you have selected, or the amount you have manually entered is used to increase the Life and TPD cover amounts. This is done to help your family pay off your mortgage debts if you pass away or become permanently disabled.
- Your debts: Either the upper range of the amount you have selected, or the amount you have manually entered is used to increase the Life and TPD cover amounts. This is done to help your family pay off other debts (such as credit card debts, car loans or personal loans) if you pass away or become permanently disabled.
Costs of raising children: The information used to calculate the costs of raising a child is outlined below. The resulting value is added to increase the Life and TPD cover amounts. This is done to help cover the ongoing costs of raising a child to the age of 19 years.
- Step 1: The lower range value you have selected is used to represent your youngest child’s age. This age is cross referenced against the relevant Costs of Raising a Child provided in Table 1.0 below.
- Step 2: The upper range value you have selected is used to represent your eldest child’s age. This age is cross referenced against the relevant Costs of Raising a Child provided in Table 1.0 below.
- Step 3: If there is only one child the lower range value you have selected is used to represent the child’s age
- Step 4: The median costs of raising a child returned for the youngest and eldest child is then multiplied by the number of children you have selected.
The ages used in this calculation are limited to the ranges provided. When selecting the age of the youngest child, the youngest age of the range is selected. When selecting the age of eldest child, the eldest age in the range will be selected for the calculation.
Please see Table 1.0 for the values that correspond to each age. See Table 1.1 to view the source used to establish these costs of raising a child.
|Age of child||Costs of raising child to age of 19 ($)|
|Costs of raising children||Data has been sourced based on the Lee Tables "modest but adequate" method 1997 - updated to 2014 CPI. Ref Australian Government - Australian Institute of Family Studies.|
5.Other immediate costs: To cover the immediate costs, such as the costs associated with a funeral, $15,000 has been added to increase the Life and TPD cover amounts. This value represents the lowest maximum benefit amount provided across Lifebroker’s 10 funeral insurance products.
The trauma cover default amount used in the calculator is $150,000, which has been calculated based on the three trauma events most likely to occur and taking the highest claim amount of all three, which is the event of stroke at $150,000.
If the calculated cover amount for Life and TPD totals more than $1,000,000, 15% of the sum insured for Life/TPD will be used as the trauma cover amount instead, to account for potential shortfalls in income. For example, if the calculated cover amount for Life and TPD is $1.5m, $225,000 of Trauma cover amount will be delivered by the calculator.
Costs for the most likely trauma events are:
|Event||Individual Lifetime Costs||Source||Notes|
|Heart Attack||$20,000||Australian Institute of Health and Welfare publication Health System Costs of Cardiovascular Disease in Australia 1993-94||Figure has been adjusted to account for inflation|
i. Australian Institute of Health & Welfare, Health System Expenditures on Cancer in Australia 2000 — 2001, Published May 2005.
ii. Optimising Cancer Care in Australia, National Cancer Control Initiative, February 2003.
iii. Access Economics — Cost of Cancer in NSW, April 2007).
|Figure has been adjusted to account for inflation|
|Stroke||$150,000||Lifetime costs of stroke subtypes in Australia, Melbourne, June 2003.||Figure has been adjusted to account for inflation|
- The cover amounts provided assume that your occupation and age allow you to purchase that cover.
- Should you pass away or become permanently disabled, and you have repaid any debts (e.g. your mortgage), a lump sum amount equal to your three years income has been added to the Life and TPD cover amounts to help account for the initial loss of household income. No long-term salary replacement has been allowed for in this calculation. To learn more about Income Protection, please speak to a Lifebroker insurance consultant.
- Income, mortgage and debt amounts that can be entered are restricted to the options and ranges provided by the calculator.
- The maximum number of children used in this calculation is limited to 5.
- Your available insurance options may be limited by eligibility after underwriting, your age, your occupation and other factors.
- The output provided by this calculator is general information only and should only be used as a guide to help you compare your insurance options through Lifebroker.
- All insurance cover is subject to eligibility and the outputs provided by the calculator are not guaranteed, nor an indication of the acceptance of these cover options, and could be changed during the underwriting process.
- This calculator can only provide you with an estimate based on the information that you provide and should not be relied on when making a decision on what cover amount you should choose or which insurance product you should purchase.
- You may want to consider the future costs of living if you have decided not to increase your cover amounts in line with inflation.
- To the maximum extent permitted by law, neither Lifebroker Pty Ltd nor any of its related bodies, employees or agents (within the TAL Group) warrants the accuracy or reliability of the calculator. Lifebroker Pty Ltd, and its related bodies, disclaim all liability to the maximum extent permitted by the law, to any person in respect of anything done or omitted to be done, and the consequences of such action or omission, by any such person in reliance upon all or any part of the information obtained using the calculator.
- Before using the information provided by this calculator, you should review the cover amounts and options, and seek further advice to understand their suitability before proceeding.
This is current as of 28 July 2015.