The importance of good life insurance when you own property
Let’s be honest. Aussies think they’re invincible. They live by the whole ‘she’ll be right mate’ attitude and assume that the bad stuff ‘won’t happen to me’. This has helped us become one of the most under-insured nations in the developed world.
Life insurance is important regardless of whether you own property or not. However, your home or an investment property will probably be one of your biggest financial assets so it’s worth protecting for yourself and your family.
Most Australians will probably have some life insurance in super, but research has shown that the average person is only covered for 14% of what they need. This means that if something bad does happen (touch wood), the people left behind are going to have to cover that gap.
Without getting too doomy and gloomy, just have a think about whether any of the following reasons to get life insurance makes sense to you:
- You’re not sure how your family would repay your mortgage if you were to pass away
- One income wouldn’t be sufficient to cover your mortgage repayments;
- Your family wouldn’t be able to maintain their current lifestyle and meet living expenses without you;
- You’re uncertain of the amount or type of cover you might have elsewhere, such as in super;
- You want to protect all members of your family and you don’t know where to start.
Ok, you’ve convinced me. Where do I start?
The first step is knowing what insurance you’re after. There are several types of life insurance, each with its own nuances.
Straight life insurance pays an agreed lump sum of money if you die or are diagnosed with a terminal illness.
Trauma insurance pays a lump sum in the event that you suffer a medical trauma that impacts your life, for example if you are diagnosed with cancer or suffer a heart attack.
Total and permanent disability pays a lump sum amount if you become totally and permanently disabled and can’t return to work again.
Income protection provides a regular monthly payment to replace up to 75% of your income if you’re unable to work for an extended period of time due to illness or injury.
The more you know about life insurance basics, the more control you have over deciding what’s right for you. To get the right answers, talk to one of our financial advisors – or at least do your own research online. Whatever way works best for you, remember that protecting your family with the right amount of life insurance cover is a key part of your lifetime financial plan.
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