Why you could consider life insurance

If you’ve ever worried about how your family would cope if you were to pass away, then you may have also wondered how much life insurance you would need and whether life insurance is worth it. You may also have questions around how life insurance works. Read on to see if life insurance could be right for you and your family.

Do I need life insurance?

The first question people ask is whether they need life insurance at all? While it’s not compulsory to have life insurance, it can provide a critical safety net if life takes a turn for the worst.

If you have dependants, including children, a partner, or elderly parents, who rely on your income, then you may wish to consider how they would continue to pay the bills if anything were to happen to you. And if you have any major debts, like a mortgage, then it can be even more important to protect your family financially so they are still able to make repayments if you’re no longer around.

With life insurance, your dependants could receive a lump sum payment if you pass away or you can receive a payment if you become terminally ill. They can then use this money however they choose to help cover their ongoing living costs.

How much life insurance do I need?

Once you’ve decided you wish to get life insurance, the next question is how much you’ll need.

To figure out how much cover you may need, here are some things you should consider:

• Your household income – how much you and your partner earn each month after tax.
• Your debt – the amount needed to settle the outstanding balance on debts like your mortgage, credit card, car loans and personal loans.
• Your household spending – how much it costs to cover your family’s living expenses each month, including everything from groceries, petrol and utilities to health care, school fees and leisure activities.
• How many dependants you have and how old they are – you will need to consider how long you need to provide for dependants (for example you may want to provide for children until they reach the age of 18).
• How much your dependants will receive – you will need to consider other sources of funds your family may receive such as from super, savings, the sale of any investments, your paid leave balance, and support from your extended family.

What does life insurance cover?

Most life insurance policies offer death and terminal illness cover. With Real Life Insurance, you can get covered for death and terminal illness (excluding death as a result of a self-inflicted injury in the first 13 months). With Real Life Insurance, you can also get free interim accidental death cover for up to 30 days, if extra time is needed for your application to be assessed.

Furthermore, you may also be eligible to receive 100% of your benefit amount in advance if you’re diagnosed with a terminal illness and have been told by a doctor that you have less than 24 months to live. Plus if your family makes a claim, they may get a 20% advance funeral payout, up to a maximum of $20,000, subject to approval, to help with immediate expenses.

With Real Life Insurance, you can also apply for Total & Permanent Disability (TPD) and Serious Illness Insurance to your cover (depending on your circumstances), giving you or your loved ones even greater protection. Children’s Insurance is also available as an optional cover.

It’s best to shop around to ensure you get the life insurance policy that suits you, your family and your household budget! But before you finalise your policy, make sure to read the product disclosure statement to check what is covered and what isn’t covered under it. 

How do I calculate how much life insurance cover I need?

If you’ve been thinking about taking out life insurance, chances are you’re wondering how much cover you’ll need to ensure those who depend on you, are adequately protected. But calculating the right cover amount could be easier than you think.

Using the Real Insurance Life Insurance calculator is a great way to get started. Simply enter some information about your financial circumstances, and the calculator will estimate the level of cover you should consider, to protect your family financially. This provides a simple estimate based on a number of economic assumptions, so if you do have any special requirements, you should seek the advice of a financial advisor.

While life insurance is an important financial decision, for most of us it is much more personal. If you have people who rely on you to provide for them, it can be important to ensure you have the right level of cover to look after them for years to come.

For more information

With Real Life Insurance, you can apply over the phone with no medical or blood test needed to apply.  And with flexible payment options available, protecting your family with Real Life Insurance may be more achievable than you think.

To find out more about your life insurance options, you can request a Real Insurance information pack or you can request a quote online now.