What is life insurance?
A life insurance policy provides financial assistance in the form of a lump sum to your family or other dependants in the event of your death. At a time when your family won’t want to be worrying about money, this lump sum can be used to meet their ongoing financial commitments, such as the mortgage, and to maintain their standard of living.
You may be thinking ‘who needs life insurance?’ Simply, if you have a family who is financially dependent on you and/or have debts that are serviced from your income alone, you should look at taking out life insurance. Obviously, the greater your financial obligations and the more dependants you have, the more life insurance you’ll need to protect your assets and your family’s financial security.
There are different types of life insurance available to you. For example, term life insurance only provides death cover and has no real investment value, but life insurance is a cumulative investment that has a monetary value at the end of the policy. You’ll need to explore your options to make sure you have the type of life insurance cover, which best suits your needs and personal situation.
Most superannuation funds also offer some form of life insurance protection if you invest your retirement savings with them. However, don’t assume this cover alone will be adequate. It will be entirely dependent upon your current needs, debts, and other obligations such as your own business, as well as the number of family members financially dependent on you.
Ensuring you have adequate life insurance given your individual circumstances can be a difficult task. We can sit down with you and discuss your current financial situation to ensure that in the unfortunate event of your death, the last thing your family will have to worry about is their financial security.
Justin McManus is a representative of AXA Financial Planning Limited, ABN 21 0005 799 977 AFSL 234663. This information has been prepared without taking account of your objectives, financial situation or needs.Before acting on this information you should consider its appropriateness, having regard to your objectives, financial situation and needs.