- Income Protection Insurance
- Life Insurance Products
- What is Life Insurance?
- Why Do I Need Life Insurance?
- How to Purchase Life Insurance
- Direct Life Insurance
- Key Person Insurance
- Trauma Insurance
- Life Insurance vs Income Protection
- Life Insurance Glossary
- Frequently Asked Questions
Why Do You Need Life Insurance?
Although you may not think you need life insurance while you’re young and healthy, it makes sense to prepare for the unexpected and to take steps to protect your family financially in case the unthinkable happens.
Dealing with a death or serious illness in the family is difficult enough without the added strain that comes with a loss of income. That’s why life insurance is so important.
Here’s how life insurance can take some of the pressure off your loved ones at a difficult time.
Why is it so important to have the right Life Insurance Policy?
In the event that something should happen to you or your partner, life insurance can help keep your family financially secure.
Yet recent statistics show that when it comes to life insurance the average Australian is woefully underinsured. The same report shows that the average level of life insurance cover meets less than two-thirds of basic everyday needs, and the average level of disability cover only meets a fraction (13 per cent) of daily living expenses.
While you probably have some level of life insurance through your super, it may not be enough. The fact is, many families today would need up to $1 million or more to protect their current lifestyle.
Who needs life insurance?
Many people don’t think about buying a life insurance policy until they have children. However, there are many reasons to consider purchasing a life insurance policy.
These might include:
- Taking care of a spouse or dependent family members.
- Protecting a business interest.
- Ensuring that you don’t pass your financial obligations or debts on to your next of kin.
That said, not everyone needs a term life insurance policy. For example, if you’re single, debt-free and have no minor children or other dependants relying on your income, you may not need a term life insurance policy at this stage of your life.
However, you may want to consider trauma cover to help cover large medical costs associated with being critically ill, or income protection insurance to protect your own lifestyle if you were unable to work.
What happens if I don’t have life insurance?
Life insurance is designed to cover different scenarios, including premature death, serious illness, total and permanent disability (TPD), or loss of income due to accidents and injury.
Not having adequate life insurance cover can leave you or your family financially exposed should you die prematurely, get extremely sick, or become disabled.
For some, this could mean losing the family home, being unable to pay for your children’s education expenses, or even being unable to cover basic living expenses without falling into debt.
Ask yourself: ‘If anything happened to me, would my loved ones be able to cope financially?’
Use our life insurance calculator to get a quick estimate of the level of cover you’d need to replace your current income.
Your life insurance checklist
To help you decide if you need life insurance, we’ve provided the following checklist.
If you answer yes to any of the following questions, you probably need some type of life insurance:
- Are you married? If you have a mortgage and other shared expenses, life insurance can help protect each partner’s standard of living in the event of death or long-term disability.
- Do you have children? Life insurance can replace your current income and make sure your dependent children are provided for now and into the future.
- Are you planning on having children? If so, you may want to buy life insurance now, as pregnancy may exclude you from buying a policy later.
- Do you rely on your income? Even if you are single and don’t have any dependants, it’s still important to protect your income with TPD and income protection insurance during your working years.
- Do you support dependent relatives? If you support elderly parents or a special-needs sibling, life insurance can help ensure they’re cared for even if you’re not around or are unable to work.
- Do you own a business or large estate? Life insurance can be used for estate planning purposes after death, such as donating to charities, paying estate taxes, or buying out a business interest.
- Do you have debt? Life insurance can be used to pay off debts that you don’t want to pass on to your family members, including funeral expenses.
Life is full of the unexpected. Ensuring you have adequate life insurance cover is one of the most important steps you can take today to protect your family in the future.
Start comparing life insurance policies from our participating insurers, or call 13 19 20 and let us help you find the right policy today.