Loading…
A 38-year-old sole income earner with two young children and a $500,000 mortgage asks how to work out life cover. Which approach is MOST appropriate?
Life cover should be based on the family's actual needs: clearing debts, funding the children's costs until independence and replacing income the family relies on, less existing assets and cover. That is how advice is based on the client's relevant circumstances (Corporations Act 2001 s961B(2)(f), compilation 19 Sep 2026) and broader interests (Code of Ethics 2019, Standard 6). Rules of thumb or quotes ignore those facts, and clearing the mortgage alone leaves the family's ongoing living costs unfunded.
Rules of thumb are a cross-check, not a substitute for the needs analysis.
Practise more Investment, debt and insurance advice strategies questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.
Start practising →Original practice material mapped to the learning outcomes in ASIC's exam guidance. Independent, not affiliated with or endorsed by ASIC. Verify figures and rules against current guidance before relying on them.