While travelling overseas recently and navigating the streets of a busy city it brought home to me how quickly change can happen – literally in the blink of an eye.
People’s lives and personal circumstances can change in an instance. And if the unexpected were to happen, would those who are left behind be protected financially?
As a parent and a partner, you try to protect your family in any way you can. That involves protecting them financially, emotionally and physically, and doing whatever it takes to keep them safe. Even if you or your partner were no longer around, you would want to make sure your family remained protected. However, without your or your partner’s income, how financially secure would your family be? Life insurance is about providing protection for your biggest asset, your ability to provide for your family.
Australian research indicates 60% of families with dependents will run out of money within a year if the breadwinner dies*.
Unfortunately many Australians don’t place importance on Life or Total and Permanent Disability Insurance (TPD). Many of the reasons we hear:
1 – It won’t happen to me. While we all hate to think about it is a reality that it will at some point.
2 – I have to get a medical examination. Life insurance examinations are only required under certain circumstances. If you decide that you do not want a medical examination, you can choose a ‘no medical’ life insurance policy. Keep in mind that this option may have higher premiums.
3 – Life insurance is expensive! In reality, life insurance costs a lot less than you may think. Life insurance offers far more financial protection compared to relying on your own personal savings if the worst should ever happen.
4 – Life insurance is bundled in with my super. Many Australians rely on the super cover provided by their super fund. Unfortunately, that cover may not be enough.
5 – Insurance companies won’t pay. Yes, they will. A life insurer is legally obligated to do the following:
• assess claims quickly
• Not delay paying claims unless there is a good reason
• Not refuse to pay claims unless there is a good reason
Its vitally important when completing an application you make full disclosure and answer all questions honestly. If a claim has to be filed and you didn’t reveal something important to the insurer, the claim may be refused.
6 – I can’t get cover with a pre-existing condition. There are many Australians with an exisiting medical condition that have been able to get good life insurance coverage.
7 – I have enough life insurance. Things change and part of your financial plan should review your insurance requirement. The amount of life insurance you should have is around 10 times your net earnings. If you don’t currently have this amount of life insurance coverage, you should consider getting more.
So, if you don’t currently have life insurance, or maybe youd on’t have enough life insurance talk to your financial planner.
IFSA Research – A Nation Exposed. Conducted for IFSA by Rice Walker Actuaries and TNS Australia, 2005.
This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs.