Life Insurance For Beginners: As much as we don’t like to think about it, one fact about life is that it will eventually come to an end at one point or another. While we all hope to live long and healthy lives, sometimes it doesn’t always turn out that way due to accidents or serious illnesses.
Unfortunately, not many people like to think about life insurance as it brings up the thoughts and feelings that go along with life coming to an end. But regardless of what stage of life you’re in, it’s an important topic to consider. Here, we’ll share how important life insurance is so that even those who are just starting to think about can see how big of a role it can play in your financial future.
To start with, many people have a life insurance policy as part of their super, which also contributes to people not thinking too much about it. However, is it enough? If you think about it, what would happen if there was no life insurance or an insufficient policy? Your spouse may have to sell the family home or take the kids out the school that they are in. Also, consider that if death is caused by a long term illness, the illness may further draw down your finances making a life insurance policy essential for your family’s financial well-being.
According to the Financial Services Counsel, 95% of Australians do not have adequate insurance coverage. Part of the reason why there’s not adequate coverage is that people aren’t taking into consideration how much they actually need. In the event of death, your wages will need to be replaced; the mortgage and household bills would need to paid, future education expenses for your children would need funding, etc. It’s not just important to think about the expenses that would need to be covered now – it’s equally important to think about the expenses that are going to need to be covered in the future.
While everyone’s financial circumstances are different, a good rule to go by when considering how much life insurance you need is to figure ten times your annual salary. But what if you’re a stay at home mum and you don’t work? Life insurance is still important. In the event of death, there are still expenses that would need to be paid for, such as childcare so that your spouse can still work.
Now that you know how important life insurance is, here are a few tips when choosing a policy:
- Check to see if the policy has a terminal illness benefit.
- Research policies with advance payment options so that funeral expenses will be covered while you’re waiting for the remainder of the policy to be paid.
- See if there are any limitations if you have a pre-existing health condition.
- Speak to a financial adviser so that you have a professional on your side who can explain your options and help you choose the best policy.
Before considering Life Insurance speak to a Paradise Financial Group life insurance specialist today.