Why have Life Insurance... do I need it?

Let’s start with a quick quiz:  

  • Are you married?
  • Do you have dependent children?
  • Do you have other dependent relatives?
  • Do you have major financial obligations?
  • Do you own a business?
  • Do you have a large estate that will take time to distribute?

If you answered yes to any of the questions above, you probably need life insurance. 

Now that you know this is important for you, here are some starting points.

Life insurance protects you and your loved ones financially should something go wrong.  In much the same way as you can take out cover on your house or your vehicle, when you take out life cover you pay a premium to your insurer and if something goes wrong, your life insurance helps cover the financial side with a lump-sum payment.  

When you have financial commitments such as a mortgage, personal loans or credit card debt or a family who depend on your income, you need to think about what would happen if you suddenly took ill and could not work – or were no longer around. 

Life insurance can make sure you have enough money to feed your family and pay your bills if you become ill, suffer a serious injury or became permanently disabled.  Life insurance is like the life jacket in the boat – you hope you never have to use it but it’s comforting to know it is there.

Should even worse happen, life insurance is even more important.  The death of a family member is traumatic enough without having to add financial stress as well!  There are far too many tragic stories of families whose financial status and lives dramatically changed for the worse after the death of the main breadwinner.

There are five basic life insurances that are available to make your life financially secure no matter what happens to you in a physical way.  These are:

  1. Term Life Insurance
  2. Total and Permanent Disablement (TPD)
  3. Trauma Insurance
  4. Income Protection
  5. Business Expenses

Each of these products provide for different circumstances – and the products offered by differing providers vary in terms and the extent of cover.  It is important to choose the policy that is right for you.  Over the next several blogs we will take a closer look at each type of life insurance.

Products vary between companies, and consumers should always read their Product Disclosure Statement (PDS) before they purchase cover. You should always purchase an appropriate level of cover for your situation. 

We understand that it can be difficult determining what types of cover and amounts you might need, let alone choosing an insurer. Your Adviser can assist by helping you determine your needs and recommend an insurer that is right for you. 

Disclaimer

Information current as at 18 February 2016 - This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.