Family life insurance exists to support your family should tragedy occur. This extra protection for your spouse and children ensures they won’t have to worry so much about financial losses if they do ever lose you, via a lump sum payment upon your death, or diagnosis of a terminal illness.
What expenses does family life insurance cover?
Family life insurance could offer the assurance you need to ensure any remaining family is looked after once one of the main income earners passes away. The loss of a person is distressing, and that’s before considering the expenses that subsequently arise, such as the immediate costs, and subsequent costs of home duties.
Immediate costs can include:
- One less income to support the household
- Funeral expenses
- Hospital expenses before death
Home duties can include:
- Childcare expenses
- Home help for household duties
- Travel for children
When should you take out family life insurance?
Life doesn’t always go to plan. In Australia, one death happens roughly every 3 minutes and 19 seconds. Life insurance can provide cover and peace of mind for your family should the worst happen.
You might be talking about starting a family, or you might already have little ones. This time of your life is filled with exciting milestones, but these life events can put a strain on your budget. Family life insurance can ensure a continued quality of life for your loved ones if an unexpected event was to occur.
Types of insurance for families
There are a selection of policies available that can suit your needs and budget. Consider your family’s circumstances when choosing a provider and policy.
Some common policies are outlined below.
Life insurance:
This covers death or the diagnosis of a terminal illness. If either of those events should arise, your family could be eligible for a lump sum payout of up to $10 million (subject to your financial requirements and the relevant Insurer’s Underwriting limits), which is usually tax-free. With iSelect, you can compare life insurance policies on offer from our range of providers.
Children’s insurance:
This covers cases where a child passes away or is diagnosed with a terminal illness or specific injury. Usually, you can take this out as an optional extra with most life insurance policies. It is paid as a lump sum payment and can cover additional medical and educational expenses.
Total and permanent disability insurance:
This comes as an optional extra with most life insurance policies to take care of instances where you become permanently disabled and are unlikely to ever work again. This is also paid as a lump sum payment and can cover medical and educational expenses. Click here to learn more.
Serious illness insurance or Trauma insurance:
This cover can be for a range of serious illnesses such as cancer, heart attacks, coronary artery bypass surgery and more. This is usually available as an optional extra cover. This cover can also assist with ongoing expenses associated with the illness. Click here to learn more.
What are the benefits of family life insurance?
Depending on the type and level of cover you take out, you’ll be insured for a variety of conditions. Generally, this includes:
- Death
- Terminal illness
- Cancer
- Heart attack
- Coma
- Blindness
- Serious organ failure
- Paralysis
- Serious burns
How to find suitable life insurance for you and your family
You may be wondering how you can compare family life insurance policies, and select the one that suits you. Below are some considerations that may assist you when comparing policies. Be sure to read the relevant Product Disclosure Statement of any policy you are considering buying:
- What is the indexation? Should you expect your benefit amount to grow with inflation?
- What conditions are covered? Is the policy comprehensive?
- What is the maximum sum-insured? How much money will be paid out if necessary?
- How many children are covered? Will your entire family be covered if it continues to grow?
Considering your unique family unit could help you when looking for appropriate coverage. Further considerations may include:
- Your financial situation - both current and future
- The age of yourself and your partner
- Your employment situation and your partner’s
- Contributions to things like household expenses, debts, and savings
- The number of children in your family
- How many years you’ll need to cover your children
- Your assets and superannuation funds (you can use these to reduce the cover you need)
How much does family life insurance premiums cost?
The premium of your policy will be determined by a number of factors such as your age, lifestyle, and the level of cover you wish to take out. There may also be financial benefits to taking out cover earlier in life.
For example, when you’re young and healthy, premiums tend to be lower. Younger families are generally eligible for an expansive range of cover options, including optional cover such as permanent disability insurance, and children’s insurance. Older families may find it more difficult to obtain cover at an attractive rate, although customers in their 50’s can certainly apply for TPD cover.
Looking for a life insurance policy? Compare with Lifebroker
With Lifebroker, you can compare life insurance policies on offer from their range of insurers to find a suitable policy for you. You can get started by comparing life insurance quotes online, or by calling our friendly team on 13 19 20.
Sources:
1. https://www.moneysmart.gov.au/insurance/car-insurance/comparing-the-cost-of-life-insurance/
2. https://www.moneysmart.gov.au/insurance/car-insurance/add-on-insurance/
3. https://www.moneysmart.gov.au/insurance/life-insurance/total-and-permanent-disability-cover/
4. https://www.moneysmart.gov.au/insurance/life-insurance/income-protection/
5. https://www.moneysmart.gov.au/insurance/life-insurance/
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