How Much Life Insurance Do I Need?

Now that you know what life insurance is and why it is so important in the financial protection of your family, the next question is usually how much cover do I need?

The simplest way to start working it out is to list all your current payments:  for yourself, your family and any debts you have. Think of things such as:

  • Your home mortgage
  • Your personal loans
  • Your credit cards debts

Then consider the things your family would still need if you were no longer there to provide for them, such as:

  • Rent
  • Food, groceries
  • Education costs
  • Petrol and car maintenance
  • Health Insurance
  • Car Insurance
  • Home Contents Insurance

The amount of cover you require will affect the premium of your policy.  However, the most important factors that affect the price of life insurance premiums are your age, gender and any pre-existing medical conditions.

Older people will generally pay more for a life insurance policy so the earlier you take out a policy the better. Heart conditions, high blood pressure, mental illness, or a strong family history of heart disease or cancer will raise your insurance premiums. Insurance companies also offer higher rates to people who participate in "dangerous" hobbies like skydiving or scuba diving. Smokers can also expect to pay higher rates.

So, rather than putting this issue in the “too hard” basket while you are still relatively young and fit, address it now and protect your family.

Lakeside Financial Planners is there to help you work out how much you need based on your situation and can assist with personal life insurance to protect your income in the event of death or illness.  To find out whether you have appropriate and accurate cover, why not schedule a meeting with Gerry or Clae now?

Disclaimer:  By Matrix Planning Solutions.  Information current at 24 June 2015.
The advice is general in nature only. Before acting you should consider the appropriateness of the information having regard to your personal objectives, financial situation and needs. You should read the relevant Product Disclosure Statement (PDS) and Policy Document before making any decision about a product.