Know Risk is a community education program designed by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to improve our understanding of insurance and how it relates to managing the many risks we all face in life.
When should you think about getting life insurance?
Ever thought about what happens to your family should the unthinkable happen?
- KR Useful (1)
As a rule, most people don’t like thinking, or talking about dying.
Have you thought about or made plans with your partner or family should the unthinkable happen? If you answered no, you’re not alone.
According to recent studies, almost one third of Australians haven’t put together a financial plan for their family in the event of their death. Worse still, it usually takes the tragic loss of a family member of close friend for fifty per cent of people to consider taking out life insurance.
And, did you know that almost a quarter of all Australians needed a major life changing event, like getting married, buying a house or having a child to influence whether or not they take out life or income protection insurance?
So…when should you consider taking out cover? Different times call for different actions; this is true of life and equally true for buying insurance. The following tips may help.
1. Till death do us part
When those rings go on, life takes a new dynamic. Few people think about the financial implications of something happening to them or their partner. Life insurance cover can help ensure that neither you nor your partner will need to worry about financial hardship if either of you were to pass away.
2. When the bun is in the oven
Here’s a commonly known fact - kids cost money. Food, clothes and education are some of the costs that grow as your children grow. If you are considering having children, or indeed if you already have a child, it is time to review your insurance needs to ensure that you have the right amount of cover to make sure your children are looked after in the event that something should happen to you or your partner.
Be it your first home, an investment property or the family castle, property is often the biggest financial commitment you will ever make. We all save hard for our first deposit and often continue sacrificing our lifestyles to ensure that we keep up with the repayments. However, how would a sudden and traumatic injury, illness or death impact on your ability to repay and retain your home? Making sure you have the right level of insurance cover to ensure that your home is protected not only against fire but also in the event of a personal trauma or death is one key strategy that will ensure peace of mind for you and your family.
4. Single with no kids
So you’re single and don’t have any commitments? Think carefully about who will be impacted should something happen to you. Funeral cover, for example is one relatively cheap way you can ensure you don’t leave your loved ones with the financial burden that often follows death.
So, what happens should you suffer a serious accident or illness and survive? Many people take their ability to earn an income for granted. Think of it this way, you are involved in an accident or are diagnosed with an illness that leaves you incapacitated, sure your hospital and medical bills may be looked after, but who will pay your rent? Your mortgage? The car loan? Food or electricity? Having the right insurance in place will help you meet your financial ‘living’ expenses in those times when you need it most.
5. The early bird gets the worm
It’s best to look at taking out cover earlier in life because, depending on the cover you choose, you may be able to take advantage of more competitive premiums. It is common knowledge that the older you get the harder it becomes to take out cover, getting in early helps ensure you get the right cover at the right time. As your life situation changes you should be able to easily review your level of cover and increase it by contacting your insurance company. A better, cheaper policy? Getting in early is the key in this strategy.