What is life insurance?
In the event of death or terminal illness, life insurance provides a lump sum to the family of the life insured.
The most popular type of life insurance in Australia is term life insurance. It is available to people aged between 17 and 69, and can usually be renewed until the last policy anniversary date that falls before the person’s 99th birthday.
Why do you need life cover insurance?
Life insurance helps to protect the life insured’s family. In the event of death or terminal illness, a lump sum is provided, which can be used to help with the following:
- Children’s education costs
- Mortgage and other loan repayments
- Enabling the life insured’s business to keep running
- Meeting the family’s ongoing income needs
Life Insurance or Life Assurance?
When looking to insure our lives the specific uses of the terms “life insurance” and “life assurance” are sometimes confusing.
In general, “insurance” refers to providing cover for an event that might happen (fire, theft, flood, etc), while “assurance” is the provision of cover for an event that is certain to happen. While death is an event that is certain, in Australia both forms of coverage are called “insurance”, because they mean basically the same.
How much life cover do I need?
Adding up the total sum of your current debts is a good place to start. From here, depending on individual circumstances, we might add in educations cost of children, funeral costs and medical expenses. The future income requirements of the family is also an important factor to consider, as many families struggle to survive after the death of the main income generator.
For more information, check our guide on “Types of life insurance“.
How much does life insurance cost per month in Australia?
Unfortunately, there is no simple answer to that question. The cost of life insurance depends on a number of factors, these are just a few.
- What is your age?
- What is your gender?
- Are you smoker or non-smoker?
- What amount of insurance do you need?
- What is your health like?
- What is your occupation?