How much cover do you need?

It can be confronting to think about, but making a plan for our loved ones in case the worst happens is important.

Read on for helpful advice about deciding how much insurance you need for your circumstances, plus where to go if you want more help.

How much cover do you need

Thinking about serious injury, illness, or dying can be confronting. So it’s no surprise that while Australians are great at insuring our cars and homes, we often overlook insuring ourselves.

Insuring your income and your life is an important step in making sure you and your loved ones are financially secure if the worst happens.

Most Media Super accounts come with a level of automatic default insurance. But we know that one size doesn’t fit all, so we've made it easy to tailor your insurance to suit your needs now and in the future.

How much insurance do I need?

We all have different financial situations, so our insurance needs are different too. That’s why instead of giving you a single dollar amount it can be more helpful to think about multiples of your income instead.

Rice Warner’s Underinsurance in Australia 2017 report estimates the insurance needs for 30 year old parents with children to be:

  • 85% of family income for Income Protection insurance
  • 4 times family income for Total and Permanent Disablement insurance
  • 8 times family income for death cover

Of course other factors, such as your age, your relationship status, whether you have kids or look after other family members, and your financial responsibilities can have a big impact on these numbers.

While members under 25 no longer automatically receive insurance when they join, depending on your financial commitments and life situation, you may want to consider applying for cover. For example, if you're married (or in a de facto relationship) you may have joint financial responsibilities (including rent, mortgages, or other loans) that will still need to be paid if one of you is unable to work. And if you have kids, you want to ensure your family is looked after.

Read on for more information, and remember the Media Super team are here to help you work out how much cover you need.

How much Income Protection do I need?

This is based on a percentage of what you earn, so it’s as simple as letting us know your income and we can adjust your insurance cover and premiums to match.

How much Death and TPD cover do I need?

It’s hard to see into the future and estimate what different injuries, medical therapies, or providing for your loved ones could cost. Our default level of cover is based on your age and will be updated at certain milestones.

The below three steps are a good starting point to help you work out what level of cover you might need.

Costs you may need to pay for

  • Step 1

    Costs you may need to pay for

    First, add up the costs of everything that needs to be paid for. Consider things like:

    • One off costs like medical bills, physical rehabilitation, changes to your home, funeral expenses, paying off the mortgage or other debts like personal loans or credit cards.
    • Ongoing costs or living expenses like rent, utilities, food, loans and education. Do you want to cover these cost for a year or longer?
  • Step 2

    Assets you can use to cover costs

    Next, what assets do you have that you could use to cover some of these costs? This may include:

    • money you could access such as savings (remember your super balance can only be used in limited circumstances, like being paid to your beneficiaries if you die)
    • existing insurance or funeral plans
    • property, like a home you could downsize or an investment property you could sell
    • other assets like shares, a car, artwork or jewellery
    • other support like annual leave, family support, government benefits or Workers Compensation.
  • Step 3

    How do they compare?

    Finally, take your total costs from Step 1, and subtract them from your total assets from Step 2.

    The difference between these provides you with an estimate of the amount of additional insurance you may need.

We're here to help

While we’ve highlighted some things to think about, our team can help you make sure you’ve got the cover you need.

Our Helpline Advisers# can help with your questions about your insurance within Media Super. If you need more personalised financial advice, they can connect you with a Media Super Financial Planner*.

“Receiving Income Protection benefits while I have been ill has taken away my financial worries, and has let me focus on improving my health. Don’t leave it until it’s too late – look into your insurance benefits with Media Super now to make sure you’re protected.”

Grant Bolte