Baby on the Way? Here’s How a Life Insurance Comparison Can Save You Money
If you have a baby on the way, it’s natural to think about the future and about steps to help protect your growing family with financial security and stability. This is why many Australians consider taking out a life insurance policy before the newborn arrives. But these policies can be expensive, so let’s take a look at how you could save on your insurance.
First, it’s essential to understand why taking out life insurance is important to consider before your baby is born.
Why Now Could be the Perfect Time to Take Out Life Insurance
Learn more about the benefits of taking out a life insurance policy with a new baby on the way.
People tend to have babies when they are young and in good health. The younger you are and the better your health is, the lower your insurance costs will tend to be.
If one parent is providing the majority of the household income, they may choose to take out income protection cover (a type of life insurance product) to protect a share of their earnings for a period whilst they are unable to work due to illness or injury.
Providing Peace of Mind
It’s always best for young or new parents to think about building their safety net right from the start. Life insurance can be a key component of this safety, leaving you free to focus on the joy of family life.
Life Insurance Comparisons: Saving Money on Life Insurance – Without Compromising on Cover
When you decide on buying life insurance, it’s essential to take the time to weigh up your options. A life insurance comparison can help you find the right insurance cover for you and your family at a competitive price.
Follow these steps as you compare affordable life insurance policies so you can identify the perfect policy and keep an eye on your expenses.
To start with, make sure that the life insurance company is reputable and provides good service. Check their rankings on consumer review sites like Feefo or Google Reviews. Customer reviews can give you some insight into how an insurer is perceived, as well as the customer experience they provide.
Build a Shortlist of Life Insurance Options
It’s wise to get a few life insurance quotes from different life insurance companies so you can complete a comparison. This will help you to understand how much you will need to pay for each policy and provide an idea of what you will be covered for, giving you a better idea of the life insurance landscape in general.
Be Aware of the Factors Affecting Premiums
Keep in mind that your lifestyle can play a significant role in the cost of your policy. A number of factors are relevant to determining premium amounts. For example, non-smokers who maintain healthy body weight and good levels of overall fitness tend to pay less for their insurance. Engaging in regular exercise and avoiding dangerous activities may also reduce your monthly payments.
Choose the Right Type of Insurance
There are several types of life insurance products available in Australia. These include:
- Life cover – sometimes called death insurance or term life insurance – pays out a lump sum in the event of death for any reason
- Accidental death cover pays out only if you die from an accident (and does not provide cover if you die from an illness, disease or suicide)
- Income protection pays an ongoing payment for a specific benefit period which applies to your cover, whilst you are unable to work due to a serious illness or injury
- TPD cover pays a lump sum if you become permanently disabled and are unlikely to be able to work again
- Trauma cover, which is insurance that pays out in the event of a specific illness
Consider Existing Insurance Coverage
Many superannuation funds provide some life insurance by default. This generally involves life cover and/or TPD insurance, and it may also include income protection insurance in some cases. If your fund does provide coverthen bear this in mind as you compare policies.
There are advantages to life insurance inside you superannuation fund. Your insurance payments will automatically be deducted from your super contribution, making it easier for some to manage costs. You may also be able to gain insurance cover without the medical checks and assessments typically associated with standalone life insurance policies. However, your insurance cover may be cancelled if you are not making regular payments on your super.
Keep in mind that for life cover within super, the sum insured might not cover all expenses your family could face when you die. If you are covered by your super, you may want to think about your level of cover and perhaps take out a ‘top-up’ cover with another company. This can be a good way to increase the amount you are covered for and get the benefit of features which are often available such as funeral cover or early payout in the event of a terminal illness.
Younger parents may want to use life insurance through super during the first years of their new baby’s life and then move to a more substantial policy later.
Factor in Education Expenses
One way to get a rough estimate for deciding how much cover you need is by multiplying your annual expenses by 10. This gives you an approximate sum of how much you might need to cover debt or mortgage payments if you were to die before your time.
But there are other expenses to consider – education costs for your children, for example. After your death, your family may not have the funds to cover such costs. That’s why including education expenses when working out how much cover you need is a great idea.
If you can reliably predict other future expenses, you can incorporate them into the total life insurance sum insured. Aim to forecast as accurately as possible to avoid overpaying for coverage that is not required.
Compare Different Life Insurance Policies to Find the Best Deal
Careful consideration is necessary when choosing the most favourable life insurance policy. When it’s time to decide, a thorough life insurance comparison can play a vital role.
Being patient and paying attention to details could be beneficial in the future, especially for those starting a family and wanting to help secure their child’s future should the worst happen.
Taking out affordable life insurance is one of the most important financial decisions you can make. To find out more about NobleOak’s life insurance products, call a NobleOak Life Australian-based insurance team member on 1300 014 494, or go online for a no-obligation quote.
This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs.