Why you should consider life insurance

If you’ve ever worried about how your family would cope if you were to fall seriously ill or pass away, then you may have also wondered how much life insurance you would need and whether life insurance is worth it. You may also have questions around how life insurance works. Read on to see if life insurance could be right for you and your family.

Do I need life insurance?

The first question people ask is whether they need life insurance at all? While it’s not compulsory to have life insurance, it can provide a critical safety net if life takes a turn for the worst.

If you have dependants, including children, a partner, or elderly parents, who rely on your income – then the answer will most likely be yes. And if you have any major debts, like a mortgage, then it can be even more important to ensure your family is able to make repayments if you’re no longer around.

With life insurance, your dependants could receive a tax-free lump sum payment if you pass away or become terminally ill. They can then use this money however they choose to help cover their ongoing living costs.

How much life insurance do I need?

Once you’ve decided to get life insurance, the next question is how much you’ll need. Generally, the bigger the payout, the more your cover will cost – but it can pay to shop around and compare quotes.

To figure out how much cover you should have, here are some things you should consider:

  • Your household income – how much you and your partner earn each month after tax.
  • Your debt – the amount you will need to settle the outstanding balance on debts like your mortgage, credit card, car loans and personal loans.
  • Your household spending – how much it costs to cover your family’s living expenses each month, including everything from groceries, petrol and utilities to health care, school fees and leisure activities.
  • Your savings goals – the amount you put away each month to save for your family’s future expenses, like home renovations, holidays or your children’s education.
  • How many dependants you have and how old they are – you will need to consider how long you need to provide for dependants (for example you may want to provide for children until they reach the age of 18).

What does life insurance cover?

Most life insurance policies offer death and terminal illness cover. With Real Life Insurance, you can get immediately covered for death and terminal illness (excluding as a result of a self-inflicted injury in the first 13 months). With Real Life Insurance, you can also get free interim accidental death cover for up to 30 days, if extra time is needed for your application to be assessed.

Furthermore, you may also be eligible to receive 100% of your benefit amount in advance if you’re diagnosed with a terminal illness and have been told by a doctor that you have less than 12 months to live. There is also a $10,000 advance funeral benefit that could be paid to your family to assist with immediate costs, such as funeral expenses. while the claim is being assessed subject to approval.

With Real Life Insurance, you can also add Total and Permanent Disability (TPD) and Serious Illness Insurance to your cover, giving you or your loved ones even greater protection. Children’s insurance is also available as an optional extra.

It’s best to shop around to ensure you get the   life insurance policy that suits you, your family and your household budget! But before you finalise your policy, make sure to read the product disclosure statement to check what is covered and what isn’t covered under it. 

How do I calculate how much life insurance cover I need?

If you’ve been thinking about taking out life insurance, chances are you’re wondering how much cover you’ll need to ensure those who depend on you, are adequately protected. But calculating the right cover amount could be easier than you think.

Using the Real Insurance life insurance calculator is a great way to get started. Simply enter some information about your financial circumstances, and the calculator will estimate the level of cover you should consider, to make sure your family is looked after, no matter what happens. This provides a simple estimate based on a number of economic assumptions, so if you do have any special requirements, you should seek the advice of a financial advisor.

While life insurance is an important financial decision, for most of us it is much more personal. After all, if you have people who rely on you to provide for them, you would hate to see them left with financial stress, if something were to happen to you. That’s why it’s important to ensure you have the right level of cover to look after them for years to come.

For more information

With Real Insurance, you can apply for life insurance over the phone – there are no medical forms or blood tests needed when you apply. And with flexible payment options available, protecting your family with life insurance from Real Insurance may be more affordable than you think.

To find out more about your life insurance options, you can get a Real Insurance information pack on our website or you can request a quote online now.

This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.