While it’s certain that we can’t predict the future, there are measures we can take to avoid risk and protect ourselves and our family as much as possible. Financial security is one of the most important things in life. Thus, it’s important to put protection in place for your loved ones if anything were to happen to you.
Life insurance can help. The right insurance cover can ensure your family is relieved of any financial stresses in the case of an emergency. Knowing your family is supported and protected in this way, can provide you with some peace of mind for life’s unexpected situations.
However, there are many things to assess before purchasing a life insurance policy. Here are 4 factors you should consider:
1. The Different Life Insurance Policies and What They Cover
- Life Cover: also recognised as ‘term life insurance’ or ‘death cover’, pays a lump sum amount if you were to suddenly die.
- Total and Permanent Disability (TPD) Insurance: Pays a lump sum amount if you were to sustain a permanent injury or illness that affects your ability to earn an income.
- Trauma Insurance: also called ‘critical illness’ or ‘recovery insurance’ pays a lump sum amount if you suffer a critical illness or serious injury.
- Income Protection Insurance: Pays up to 85% of your pre-tax income for a specified time if you’re unable to work due to partial or total disability.
When looking for the right policy, It’s important to consider what each life insurance product covers. Assess your total expenses – think about all the things you’d want to ensure your family has financially covered if something were to happen to you. Insurance money can help you cover your mortgages, bills, funeral expenses and more.
You may also want to take into account your daily living costs, such as food, petrol, and bills. Considering the costs of your lifestyle can you help you decide what type of life insurance cover would be most beneficial for you and your loved ones.
2. The Exclusions that Apply to Each Policy
It’s important to assess the product disclosure statement (PDS) of the insurance policy to know what is included. There is no point investing in a life insurance policy that excludes what you are wanting or needing. By law, an insurer must provide you with a PDS, so here are the key things you may want to check:
- What the policy covers and what it excludes;
- what information you will need to provide the insurer;
- information on the policies premiums and how they change over time;
- What the waiting periods are before you make a claim;
- how you can make a claim;
- how to file a complaint about the claims process or decision.
The PDS may be able to help you compare life insurance policies however, this can become quite technical and complicated. A financial planner can help you carefully choose a life insurance policy that is best suited to your individual circumstances and help you make the informed choices when it comes to protecting your family.
3. The Needs of Your Family
Life insurance will not only cover you but your family as well. If you have a family to support, then you might want to consider exploring a personal insurance plan. When considering life insurance, you should plan ahead to ensure you can meet your family’s needs in the future.
Investing in life insurance may help you cover tuition fees for your children should you not be able to do so. Extending your protection towards your dependents will make you feel more at ease if anything should happen.
4. When to Get Insured
One of the most common questions we get asked as financial planners in Brisbane is: “When should I get life insurance?”.
There is no right or wrong answer.
That being said, the earlier you get insured, the longer you will be protected. The last thing you want is to wait until it’s too late. Unfortunately, accidents happen everyday and it pays to be protected.
All things considered, try to invest in a life insurance policy at your earliest convenience. Make sure to do the proper research to find one that fits your lifestyle and covers all of your needs as well as your family’s.
Life insurance is not just a financial investment but a personal investment.
When you and your family stay protected, you will have one less thing to think about for the future.
Make smart financial decisions with HH Wealth. We are the best financial advisor in Brisbane that will give you holistic advice on budget and debt management, life insurance, wealth creation and more.