Life is unpredictable, and while we can't control every twist and turn, we can certainly plan for the unexpected with life insurance.
Life is unpredictable, and while we can't control every twist and turn, we can certainly plan for the unexpected.
An essential aspect of this planning is to secure your family's financial future with life insurance. In this comprehensive guide, we'll dive into the key things you need to know about life insurance.
Life insurance is a contract between you and an insurance provider that ensures a predetermined sum of money, known as a death benefit, will be paid to your beneficiaries upon your passing. This financial safety net can provide your loved ones with the means to cover expenses like funeral costs, mortgage payments, outstanding debts, and daily living expenses.
Term life insurance is one of the most straightforward forms of life insurance. You select a term (e.g., 10, 20, or 30 years) and if you pass away during that period, the death benefit is paid out to your beneficiaries. If you outlive the term, the policy typically expires and no benefits are paid. Term life insurance offers affordable coverage for a specific period, making it suitable for expenses that are due over a specific, set duration, such as mortgage repayments or tuition fees.
Life insurance can also be included within your super.
Firstly, ask yourself how your loved ones would be provided for if you were no longer around. If you have dependants, such as a spouse, children, or aging parents, life insurance ensures they are financially cared for if you're no longer around to provide for them.
Life insurance can help your family settle outstanding debts like mortgages, personal loans, and credit card balances, preventing them from inheriting a financial burden.
Life insurance can also play a crucial role in your estate planning strategy, allowing you to leave behind a legacy for your beneficiaries or support charitable causes.
If you're a business owner, life insurance can facilitate a smooth transition of ownership and protect the business' financial stability in the event of your passing.
Some life insurances include trauma cover that can be claimed for certain critical illnesses, so it’s worth investigating if this is offered by your provider.
You should be aware of several factors that influence the cost of your life insurance premiums:
Selecting the right life insurance coverage requires careful consideration of your individual circumstances. Here are a few tips to help you make an informed decision:
In the unfortunate event of a loved one's passing, making a life insurance claim doesn't have to be a daunting process. Just follow these simple steps:
Life is dynamic and fluid, and so are your financial needs. It is, therefore, important to review your life insurance policy periodically, especially when major life events occur, such as marriage, the birth of a child, or purchasing a home.
Adjust your coverage as required to ensure it aligns with your current family circumstances and no-one that you’d want to look after once you’re gone is left out simply because you haven’t updated your list of beneficiaries or adequately increased your coverage.
Life insurance is a vital component of your financial planning toolkit. It offers peace of mind, knowing that your loved ones will be financially protected in times of need, long after you’ve gone.
By understanding the need for life insurance, factors influencing premiums, and the importance of choosing the right coverage, you can make informed decisions that safeguard your family's future.
Remember, life insurance isn't just about you – it's a gift of security and stability you can leave behind for those you cherish the most.
For full details on life insurance options, visit MLC or Plum.
The information in this article is current as at November 2024 and may be subject to change.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.
