What Is Life Insurance And Why Do You Need It?

What Is Life Insurance And Why Do You Need It?

Like most Australians, the chances are pretty good that you’ve already insured your significant assets like your house, contents, car and maybe a boat or caravan if you have one. But what about your biggest asset?

You may not be aware, but your family’s biggest asset is you. Did you ever consider what would happen to your family and their lifestyle if you were to die?

Fortunately, taking out Life Insurance can ease the financial burden on your family after you’ve passed. Life Insurance provides your loved ones with a lump sum benefit if you die prematurely or are diagnosed with a terminal illness. They can then use this benefit for mortgage repayments and other loans, credit card bills, ongoing living expenses, your children’s education, etc.

So, if someone you love relies on your income, you should consider insuring yourself.

How it Works

The idea of Life Insurance is simple. You take out a policy, and the insurer agrees to pay your nominated beneficiaries a lump sum benefit if you die during the term of the policy. Most Life Insurance is ‘guaranteed renewable’, meaning once you start a policy with an insurer, they must allow you to renew that policy each year, provided you pay your premiums in full and on time. And while it might sound simple enough, Life Insurance can also be complex, so it pays to talk to an adviser.

Superannuation

Many people take out Life Insurance through a superannuation fund. This reduces the overall cost of the insurance policy because of tax advantages available within super. When people arrange to ‘replace’ the premiums paid from their super, their overall retirement savings are not affected.

Do I Need Life Insurance?

The last thing anyone wants would be for their family or loved ones to suffer financial hardship if they were to die. Depending on your circumstances, you should seriously consider Life Insurance. Even if your loved ones have some form of reliable ‘passive income’ that would continue if you are no longer here, Life Insurance is a critical component of a personal financial plan. It provides peace of mind for all concerned.

How Do I Arrange Life Insurance?

The best advice in taking out Life Insurance is to talk to a financial adviser. They are specialists in calculating the right amount of insurance you need for your circumstances. They can also advise you of what you can afford and how it should be arranged (for example, whether you need a combined TPD policy or have it deducted through your super). Your adviser will help you select a reputable insurer with a good record of paying claims when the time comes.

What Happens if I Need to Make a Claim?

The added stress of claiming after losing someone close can be traumatic. Save them the worry of having to make a claim by asking an insurance professional to arrange it for you beforehand. They’re the experts in dealing with insurance companies and can ensure that everything runs smoothly and that they will pay your claim as quickly as possible.

What do I need to do now?

Riviera Wealth Partners provide tailored Financial Planning and Insurance advice to safeguard you and your family’s financial future.
For more information or to see how Life Insurance can help you, please contact us. If you have existing Life Insurance cover, we can review your policy to make sure it’s still suitable for your circumstances now and that it’s still cost effective for your overall financial goals.