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NobleOak remain committed to our clients during this uncertain time and we’re proud take part in the FSC COVID-19 initiative to support frontline healthcare workers

Life Insurance

I Want Life Insurance – Where Do I Start?

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

Knowing the steps and some important details can make the process very straightforward.

Getting Life Insurance can at times seem overwhelming.

It’s not the most cheerful subject to think about and certainly isn’t any fun to handle. Plus, some people can find it confusing as it seems like a complex subject, and because of all these reasons, people tend to disregard it.

However, Life Insurance can be one of the pillars of financial stability for the whole family. It’s potentially a key step to take when it comes to thinking about financial security.

Death is unavoidable and can come unexpectedly. There’s no way around it. Since that’s the case, it’s best to prepare for it in an efficient way.

Life Insurance can bring a great deal of financial security to your family after you die; and taking some time to get to know what the options are could prove really valuable in the future.

Besides, most of the complications are only surface deep. Getting Life Insurance is, in fact, much easier than it seems. All it takes to make the process more straightforward is to scratch that surface.

There are several questions to answer that will create a good starting point in choosing your Life Insurance. In this article, you’ll find out some tips about what you need to get started.

Getting Life Insurance – Five Questions to Answer

The bulk of the confusion about Life Insurance comes from not knowing what’s important. But once you have the vital questions answered, the matter will look much less complicated.

1. What Type of Insurance Do I Need?

Life cover (also called ‘term life insurance’ or ‘death cover’) is a life insurance product which provides a lump sum to your beneficiaries after your death or (with many life cover policies) upon diagnosis with a terminal illness.

Meanwhile, TPD insurance covers severe disabilities –  if you become unable to work again as a result of sickness or injury, this type of life insurance pays a lump sum amount.

Income protection cover can pay a regular income for your benefit period, whilst you are sick or injured and unable to work as a result.

Additionally, a number of life Insurance covers are often available through superannuation funds.

2. How Much Insurance Do I Need?

Of course, you can’t exactly predict how much insurance you might need. But you could narrow the figure down with careful budgeting.

Here are some considerations when it comes to planning your Life Insurance.

  • What are your family’s regular living costs? Do you have any plans for reducing or expanding them in the future?
  • Do you have personal savings? What assets do you have available?
  • What’s the state of your loans and credit cards? Do you have a mortgage and how much do you owe on it? Do you have other debts and how long would it take to pay them off?
  • What would your family’s income look like after your death? Are there other sources of income they could count on?

Once you answer these questions as best as you can, you’ll have a clearer picture. You can also get an estimate for how much Life Insurance you might need by using a Life Insurance calculator as a tool to help you consider your needs.

Other factors you can take into consideration will depend on your life circumstances. For example, if you have small children or are planning to have kids, include the costs for their future education. You could also consider a retirement fund for your partner.

3. Where Can I Buy Life Insurance?

There are plenty of ways to buy Life Insurance. To start with, you can do it directly through an insurance company. There are also independent financial advisers and those that work online.

Do your research and choose a reputable company or adviser.

4. When Should I Consider Life Insurance?

The right age to buy Life Insurance will depend on your circumstances. One reliable indicator of the need to consider Life Insurance, is when you have people who depend on you financially. In most cases, this would mean your family.

Generally, the sooner you start to think about Life Insurance, the better.

If you can predict with certainty when you’ll have others depending on your income, you can adjust your arrangements accordingly. The most obvious example would be when you’re planning or expecting kids.

And if you already have unsecured debt, Life Insurance could be a wise choice. For credit cards, the balance does not go away after death. The debt could fall on those closest to you should you pass away.

5. What Expenses or Debts Could your Life Insurance be used for?

It’s useful to know what your Life Insurance amount can cover. Knowing this will help you make a decision and have a more detailed plan for the future.

The most important is likely the financial protection your family might be eligible for. Your policy could ensure that the home budget doesn’t become overburdened without your salary. Life Insurance can be an effective way to help secure the future education of your kids if you’re not around to provide for this.

Debts and mortgages can come as a shock in the case of death. If there are debts left behind when you die, those might be too much for your family to handle. Sufficient Life Insurance could provide a good solution to that problem.

Funeral costs are an expense most people don’t like to think about. However, they can present a significant blow to the family budget. Additionally, dealing with them is more stressful for people who have just lost a loved one. Again, Life Insurance could help with that. Not having to worry about the funeral costs can somewhat alleviate a difficult situation.

Creating a Better Potential Future with Life Insurance

After careful consideration, you’ll now have a better understanding of what kind of Life Insurance would be best for you.

The choice is probably one of the more important life decisions to make. While experts on the field might provide detailed insight, the best starting point is to ensure you know what you’re aiming for.

The process of getting Life Insurance isn’t as complicated as it seems. But like other vital decisions in life, it requires your full attention. Dedicating time to figure out the essential questions could bring you closer to choosing the ideal policy.

To insure or not to insure…

…that is a question that only you can answer, perhaps with the help of some professional advice. This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs. You should carefully consider the Product Disclosure Statement before making a decision on a life insurance product.

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Resources:

https://www.moneyunder30.com/how-to-buy-life-insurance-online

https://www.thebalance.com/who-needs-life-insurance-2645793

https://www.principal.com/life-insurance-101-step-step-guide

https://www.moneyadviceservice.org.uk/en/articles/life-insurance-how-and-where-to-buy-it

https://www.investopedia.com/articles/investing/072816/what-best-age-get-life-insurance.asp

https://www.moneyunder30.com/how-to-buy-life-insurance-online

https://www.choice.com.au/money/insurance/life/buying-guides/life-insurance

https://www.nobleoak.com.au/life-insurance-guides/starting-out/

https://www.seniors.com.au/life-insurance/how-much-life-insurance-do-i-need

https://moneysmart.gov.au/how-life-insurance-works/insurance-through-super

https://www.canstar.com.au/life-insurance/term-vs-whole-life-insurance/

 

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