Multiple of income insurance cover

The possible failing of this approach is that it doesn't take into account your family's needs.

Assume you earn $40,000 pa. If your superannuation fund provides life insurance cover equal to seven times your wage this will provide you with cover of 7 X $40,000, which is $280,000.

As you can see from the scenario in the first example of a needs-based approach, there could be a large difference between what is needed and what is in place.