Key Events That Can Trigger the Need for Life Insurance Cover
Some life events can place a huge burden on your finances. But adequate insurance can lift much of that burden. Be wary of these life-changing events.
The insurance statistics in Australia are worrying – only about half of all Australians have some kind of life insurance. What’s worse, many of these people may be underinsured.
The situation is especially distressing with respect to the working population (18-69 years old). Only about 35% of them have some form of Life Insurance, with half of those policies providing sufficient cover for less than 50% of the family’s basic requirements.
The average Australian doesn’t believe that insurance is necessary. But should the worst happen, it’s already too late to look for insurance cover. So, what are some of the life events we should consider?
Here’s some key events in life that should be a trigger for you to consider life insurance or review your existing cover:
Event #1 – Marriage
In a marriage, the two of you may combine your income meaning your earning potential grows. You make financial decisions together and your lifestyle changes.
But what if something happens to one of you? Financially, it could become impossible to maintain the household. You may even need paid assistance around the house.
The grieving period is also essential and will affect you financially. You have to deal with the cost of the funeral and taking time off work. Along with the breathing space to make changes and plan your life without your loved one.
Tip: Don’t overlook the inclusion of the “estimated salary of a stay-at-home partner” when considering cover levels in your insurance policy. Even if a stay-at-home partner doesn’t have an income, they typically provide essential and valuable services (childcare, cleaning, etc.) for the household as a whole.
Event #2 – The Birth of a Child
A child gives you yet another thing to think about! You want to provide them with a fulfilling upbringing and the best possible education.
But this gets much harder for a two-parent household if one parent passes away or because of illness or injury finds themselves in a situation where they’re no longer able to provide adequate support. Will the other parent have access to sufficient funds to provide the child with adequate care and the proper lifestyle? Not to mention, pay for things such as a university education?
Adequate life insurance products can provide the necessary support for your family. If something happens to you or your partner, you can be certain that there is something to fall back on.
Event #3 – Income Changes
Any change in your overall finances should make you consider changing your life insurance cover.
For example, if you change jobs or get a promotion and are making a higher income, you may want to increase your insurance cover levels. You are more likely to be able to afford it and the higher salary may make you and your family more accustomed to a more upscale lifestyle.
Event #4 – Buying a New Home
Your responsibilities tend to increase along with family growth. As an example, at some point you may need to upsize your home. Today, this usually means a mortgage with a long-term arrangement.
A death in the family can completely ruin your plans, both physically and financially. The house might suddenly become too big for you to maintain, and the size of the mortgage potentially too big to meet payments comfortably.
Fortunately, life insurance can provide financial coverage potentially enabling you to manage on a single income.
Sometimes there may not be a specific life event trigger. It’s therefore also beneficial to make a habit of thinking about your life insurance needs on a regular basis, because things gradually change over time.
Ultimately, small changes in your life can compound and have an impact your life insurance needs, so in general, you should consider reviewing your insurance cover at least every two years or so.
Changes are Inevitable, Face Them Prepared
Many Australians don’t consider life insurance even when something big happens. You shouldn’t be one of them.
These are key events in life that should lead to you considering your life insurance needs. As importantly, they should also trigger you into a period of research that will help you find the right insurer and the right products for you.
Making the wrong choice could be almost as damaging as having no insurance at all!
NobleOak is an award-winning Australian life insurance company. Consider your needs and get a quote on our website right away to help secure your future.