The calculator has been provided in good faith by the Trustee of Cbus offering Media Super products, United Super Pty Ltd ABN 46 006261 623 AFSL 233792.

 

The Trustee does not intend that this calculator will influence your decision about your super or any financial product and no such intention should be inferred.  You should also read the additional information in the disclaimer tab.

What does this calculator let you do?

This calculator is for educational purposes.  It can illustrate your potential needs which could be met by Death or Death and Total and Permanent Disablement (TPD) insurance cover that is typically available within superannuation.

This calculator does not consider your overall insurance needs including for trauma, private health, or long-term income protection cover.

Your insurance needs are assessed as the amount of cover as a lump sum that is sufficient to meet short term financial needs and maintain the desired living standard for you and/or your family in the event of your death or TPD.

The calculator does not consider your eligibility for insured cover or the affordability of the estimated insurance cover.

Assumptions

The assumptions underlying the calculator are consistent with industry standards.  You can change the assumptions, however, it is the opinion of the issuer of this calculator that the default assumptions are reasonable, as outlined in the sections below.

Any alteration you make or input you provide will be assumed to apply for the whole of the calculation period

You can alter the default settings set out under 'Settings' and 'About you’.

Calculation methodology

This calculator considers your death and TPD insurance needs across the following areas:

  • Immediate expenses - in the event of death or disablement there can be some initial expenses such as funeral costs or home renovations costs that you may wish to insure for. There is no early release payment for immediate expenses from Media Super and funeral expenses cannot be paid directly. Any payment to an individual or the estate will be made once the final claim is approved. 
  • Outstanding debts - in the event of death or disablement you may wish to have in place sufficient insurance to pay off your outstanding debts.
  • Household education expenses - if you have dependent children you may also wish to insure for the cost of education expenses, as well as the cost of further education for your partner, in the event that you die or become disabled.
  • Ongoing expenses - in the event of your death or disablement you may wish to have sufficient insurance to cover your family's ongoing living expenses. The insurance is defaulted to cover ongoing living expenses for a period of three years. You may change this assumption in the 'Your cover' section.

The calculated insurance needs are offset by the available assets or income you may have access to in the event of death or disablement that can be used to fund immediate or ongoing costs.

Immediate expenses

By default, the calculator assumes immediate costs upon death or TPD of $20,000. You can override this value in 'Your cover' to reflect your expected immediate costs. There is no early release payment for immediate expenses from Media Super and funeral expenses cannot be paid directly. Any payment to an individual or the estate will be made once the final claim is approved. 

Media Super acknowledges that immediate financial needs in the event of death or TPD will be highly dependent on your personal circumstances, however as a default $20,000 is expected to be a reasonable estimate for funeral costs or minor renovations to your home in the event of disability.

Outstanding debts

By default, the calculator does not include any debt repayment.

You should consider your outstanding debts and which ones you would like to include in the assessment of your insurance needs. Any debts you wish to include can be added in 'Your cover'.

Household education expenses

By default, the calculator assumes that the per annum cost of children’s education expenses is $20,000 and that these costs are payable from age 12 to 21 for each of your dependent children. You can override the annual costs and the ages from which the costs are expected to apply in 'Your cover'.

Media Super acknowledge that costs of private education can be quite varied, however as a default $20,000 is expected to be a reasonable estimate of the average costs per annum of private education.

The calculator also assumes that the entered costs per annum increase each year with the rise in cost of living assumption found in 'Settings'. You can change this figure in 'Settings'.

The calculator determines the present value of these costs assuming the insured amount is invested and earns returns (net of tax and expenses) equal to the investment rate of return found in 'Settings'. You also have the ability to change the investment rate of return in 'Settings'.

Ongoing expenses

By default, the calculator assumes that the per annum cost of ongoing living expenses which you wish to insure is equal to 100% of the current net of tax income received by you and your partner (if applicable) for a period of three years. You can override the annual cost of ongoing living expenses, as well as the period over which this is to be insured, in 'Your cover'.

In particular you should consider whether you have elected to clear any outstanding debts in the event of death or disablement and the impact this may have on your, or your family's cost of ongoing living expenses.

The calculator assumes that future contributions to your superannuation will cease in the event of your death or disablement.

The calculator also assumes that the entered costs per annum increase each year with the rise in cost of living assumption found in 'Settings'.

The calculator determines the present value of these costs assuming the insured amount is invested and earns returns (net of tax and expenses) equal to the investment rate of return found in 'Settings'.

Available assets and income

In assessing your death and disability insurance needs, the calculator also considers the available assets and ongoing income you or your family may have to offset these needs. You can make changes to these assets in 'Your cover' (under 'Available assets and income').

You have the option to include amounts of investment assets, cash or superannuation balance that you intend to sell or access to fund the costs of your financial needs in the event of death or disablement.

Please note any funds intended to be accessed from superannuation would be subject to 'conditions of release' with superannuation legislation and any rules pertaining to the fund.

In calculating you insurance needs, the calculator assumes that income you or your partner may receive following your death or disablement goes towards meeting your (or their) financial needs for the same period of time as you have specified that you wish for your insurance to meet your ongoing living expenses (or three years by default if you have not chosen an alternative period). 

You can also enter the annual income you expect to receive from other investments. Note, it is important not to include any investment income you receive from assets that you intend to sell in the event of your death or disablement.

The calculator also assumes that the entered ongoing incomes per annum increase each year with the rise in cost of living assumption found in 'Settings'.

In determining your insurance needs, the calculator offsets your insurance needs by the present value of these ongoing income amounts assuming a discount rate equal to the investment rate of return found in 'Settings'.

Insurance needs

The overall insurance cover needed for Death and TPD shown in the calculator is the total of immediate financial needs (immediate expenses, outstanding debts to be paid) plus the present value of any ongoing living costs (household education expenses, ongoing living expenses) less available assets you have or would sell or future income you expect to receive to fund your family's financial needs in the event of your death or disablement.

In practice financial needs in the event of death can sometimes be quite different to those in the event of disablement. To assess your needs to greater detail, we recommend you talk to a licensed financial adviser.

Tax

The calculator does not take into account any tax that may be payable on insurance benefits received by you or your beneficiaries. Any tax that may be payable will depend on the circumstances of the payment and the source of any insured benefits. You may wish to get advice from a licensed financial adviser.

 

Settings

Inflation

The calculator also assumes that the entered ongoing incomes per annum increase each year with the rise in cost of living assumption found in 'Settings'.

When determining the present value of future income/costs for the purpose of identifying insurance needs, the calculator assumes that the ongoing income/costs increase over time at a rate equal to the rise in cost of living found in 'Settings'.

By default, the rise in cost of living is set at 2.5% pa. Media Super acknowledges that the cost of living for individuals will be quite varied and dependant on the individual's circumstances. However as a default 2.5% pa represents increases in line with the mid-point of the Reserve Bank of Australia's target range for CPI inflation.

Investment rate of return

When determining the present value of future income/costs for the purpose of identifying insurance needs, the calculator assumes the insured amount is invested and earns returns (net of tax and expenses) equal to the investment rate of return found in 'Settings'.

By default, the investment rate of return is set at 6.0% pa. Media Super acknowledges that the investment arrangements of insurance proceeds will be quite varied, however as a default 6.0% pa represents a reasonable assumption and reflects the return expectation on a conservative investment strategy with a majority allocation to defensive investments.

 

Next steps

Before you get any personal insurance cover, we recommend you talk to a licensed financial adviser. We also recommend that you review your insurance needs on a regular basis as your personal circumstances may change.

 

Glossary

Death, Terminal Illness and Total and Permanent Disablement (TPD)

A one-off, lump-sum payment of the money in your super account plus any insurance cover you have upon your death, diagnosis of a terminal illness or if you are totally and permanently disabled due to sickness or injury.

Income protection

Paid to you to replace part of your income if you become totally or partially disabled due to sickness or injury. Benefits are payable monthly after a waiting period.