Insurance Cover
Introduction

Assumptions and Disclaimer
Default assumptions
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Retirement age
 
Self
Partner
Retirement age
Life expectancy
Investments
 
Before retirment
In retirement
Rate of return (net)
 %
 %
Deductions for accumulation phase
Insurance premium pw
$
 
Fees pw
$
 
Management fee
 
%
Deductions for retirement phase
Fees pw
$
 
Management fee
 
%
Assets outside of super assumptions
Inflation assumptions
Salary inflation rate
 
%
Rate of inflation (CPI)
 
%
AWOTE rate
 
%
 
 
 
 
 
 
Assets
Growth rate
Income rate
Financial investment
 
%
%
Personal
 
%
%
Other
 
%
%
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Disclaimer

The assumptions contained in, and the results obtained from, this calculator are believed to be accurate and are made in good faith. However, to the extent permitted by law, we disclaim all liability 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 any part of the information obtained by using this calculator.

All contents are (c) Copyright 2016, All Rights Reserved.

Assumptions
1. A real investment return of 2% pa, relative to average weekly earnings (AWE), is used to capitalise future expenses. That is, a 2% pa real return is used to convert required income streams to lump sums. This real return is broadly based on an assumed rate of AWE inflation of 4% pa and net investment return of 6% pa. The AWE assumption of 4% pa is 1.5% pa higher than the mid-point of the Reserve Bank of Australia's target range for consumer price index inflation of 2%-3% pa. An untaxed return of 6% pa from conservatively invested funds is consistent with long-term historic returns and may be an appropriate investment in some circumstances.
The actual real return could vary substantially from this because of the inherent volatility in wage inflation and investment returns, and because of its dependence on the investment strategy adopted and the taxation status of the investment. Accordingly, if the capitalised future expenses component of the derived sum insured is a significant proportion of the total, then the user should seek advice as to a more appropriate after-tax real investment return to use.
2. Cover over the default amount of insurance is calculated on the assumption of a successful underwriting outcome, ie satisfactory assessment and acceptance by the Insurer.
3. Dependants include: your spouse (including a same-sex spouse); any child (including a child of a same-sex relationship); any person who is financially dependent on you; or a person who has an interdependency relationship with you.
4. The number of years to cover future expenses is defaulted to the number of years between your current age and age 70.
5. No allowance has been made for fees or charges.
6. The required level of income protection cover is calculated as 84.5% (rounded to 85%) of salary. The 9.5% payment to your super account may vary to match any future changes in the Superannuation Guarantee rate.
Income protection benefits will be paid as up to 75% of pre-disability income direct to you, plus up to 9.5% of your pre-disability income paid into your super account provided that your agreed value of income protection cover is sufficient.
The 9.5% payment to your super account may vary to match any future changes in the Superannuation Guarantee rate.
7. The calculation of required Death cover with dependants, or TPD cover with or without dependants, excludes emergency funds. Emergency funds in these circumstances are assumed to be maintained after the event. For the calculation of required cover for Death only cover with no dependants, the emergency funds are included in the calculation by reducing the required cover by the amount of emergency funds entered. The emergency funds are assumed to contribute to expenses, debts etc.

If your actual situation differs from the assumptions made, then the calculations may differ from your actual amounts.