Taking out life insurance can help protect your family from financial burden if you were to pass away unexpectedly.
Who should consider life insurance?
Life Insurance is for anyone looking for financial protection for their loved ones. For instance, many younger couples consider this type of insurance when they start a family and have children who need to be looked after in the unfortunate event one or both passes away. It can also be beneficial for more mature couples, particularly those approaching retirement to finish paying off the mortgage. In this instance, your life insurance payment can provide the means to clear remaining debts that may otherwise be too great to overcome on a single income.
What are the benefits?
The biggest benefit of life insurance is that it can be customised to suit your lifestyle. You can often make changes to your policy based on life events such as the addition of a mortgage or if your family situation changes.
What will impact my premium?
In addition to the level of coverage you choose, your age, gender, health history, smoking habits, hobbies and several other factors may influence the cost of your premium. The type of cover, which can include coverage for accidental death or death caused by illness, will also affect your premium. You can also choose between stepped and level premiums. These factors may dictate how much your premium will change overtime.
How much life insurance do I need?
Before you take out a life insurance policy, it’s a good idea to assess your current financial situation and base your decision on what your expenses are now and are likely to be in the future. To decide on the coverage amount, you may want to consider the size of your mortgage and other debts, but also anything else that your loved-ones might need money for if you pass away. This may include childcare, education bills, general living expenses and funeral costs. It’s also a good idea to find out how much life insurance is included in your superannuation – don’t assume this alone will be enough. Moneysmart offers further information on what to consider when deciding on how much life insurance to take out.
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