You may have come across the term life insurance several times, but what exactly does life insurance mean? In simple words, life insurance is a contract to provide an income source for your family, children, and other dependents –when you are unable to do it.
When you take on a life insurance policy, you agree to make an agreement with an insurance company. The company agrees to make a round figure payment to heirs in the case of any unfortunate incident. It helps in meeting important financial commitments, including;
- Daily Living Expenses and Bills
- Rent, car, and mortgage payments
- Education expenses for your children
- Funeral costs
- Outstanding debts
Why You need Life Insurance in the First Place?
Life is a set path that comes with ups and downs. Although, you don’t consider life insurance and avoid thinking of anything bad while being young and healthy, it’s smart to prepare for unforeseen and take steps to financially protect your family prior of any incident.
Isn’t the Super Fund well enough to Cover?
Being an Australian citizen, you might got super fund to some extent. However, it’s important to find out that you are getting rightly covered.
Do some research!
According to Australian law, super fund trustees must provide automatic insurance cover to their members. And premiums are usually deducted from your super contributions. What you have to find out is the cover type you have.
Most of the time, the level of coverage might not be exactly what you and your family need, however, it can be adjusted by consolidating your funds into one (in case you have more than one super fund). Consider having an eye on the investment performance, fees charges, and the type of insurance benefits available.
In case of a loss of super account, contact Australian Taxation Office to help find your lost super. Mostly, the super fails to cover all the daily expenses in times of need.
Difficult times are inevitable in one’s life span. Dealing with serious illness, or loss of loved one is difficult in its own measures. And the added strain due to loss of income makes it worst. This is the reason why life insurance is important.
Here’s how life insurance relieves some of the pressure off your family during afflictions.
Why it’s Crucial Having the Right Kind of Life Insurance Policy
Any incident resulting in something bad happen to you or your loved one, life insurance can help your family by keeping them financially secure.
A standard Australian lifestyle needs up to $1 million or even more to stay financially stable in current scenario. Yet latest figures show that the average Australian is extremely underinsured. Reports also suggest that the average life insurance covers less than two-thirds of basic everyday expenses. And, the average disability cover meets only a fraction of daily needs.
This is the reason you should understand and get the right life insurance that would be enough to keep things running after anything happen to you or your partner.
Who Would Need Life Insurance?
The need of life insurance persists in all stages of life. However, most of the people don’t think about having one until they start a family or have children.
Only if you’re single, debt-free, have no dependents relying on your income –then you probably don’t need a term life insurance in the first place. Albeit, there are some common risks one may face. Here’s a list of those and how to insure besides them.