Is there ever a good time to think about life insurance?

August 6th, 2012 by

family life insuranceOf course there is, and if you do not have a life insurance policy, the time is now. In fact, having a life insurance policy in place is one of the most caring investments you can make for your family.

Australians are notoriously underinsured, although not when it comes to their cars or homes. In fact, if anything were to happen to your car or home tomorrow – burglary, theft, fire – you know your auto or home insurance will be there to repair or replace your lost or damaged property. So why wouldn’t your life be as valuable?

If you think about it, your life is far more valuable than you may realize, particularly to the loved ones who would be left behind if you should die. Without life insurance, the legacy you could be leaving them could be a hefty financial burden that may spell disaster for them. If you are the family breadwinner, who would pay the mortgage on the family home, put food on the table, or make sure the children’s school fees are taken care of if you were to die unexpectedly?

Life insurance can give you the peace of mind that comes with knowing your family will be taken care of if you aren’t there to provide.  If you’re afraid life insurance won’t fit into your budget, compare life insurance policies and see what options different providers are offering. You may be surprised to see more than one life insurance plan with a premium you can manage.

How does life insurance work?

If you were to pass away, your life insurance policy will make a lump sum payment of its value to the beneficiary you named, most often a spouse or an adult child.  You can add other types of insurance to your life insurance policy as well, such as total and permanent disability insurance that pays if you are diagnosed with a serious illness, or severely injured.  You can add trauma insurance for your children to a life insurance policy, and have the comfort of knowing that if they should become ill or injured, the trauma insurance can provide you with the ability to pay for specialists, treatments, and other benefits Medicare and even private health insurance often does not cover. It can even pay for lost income if you need to take time off from work to care for your child.

When you decide to bundle insurance policies together, the advantages include a possible discounted premium, incentives, and the convenience of paying just one premium monthly.

How does life insurance safeguard my family?

If you sit down and make a list of the everyday expenses your family incurs – mortgage or rent, for instance, groceries, utilities, car payments, school fees, clothing – the list may seem endless – you will quickly get an idea of the price your family will pay with the loss of your income.

When a loved one dies unexpectedly, the emotional toll on the family is devastating. Imagine the added burden of paying your funeral costs in addition to suddenly being faced with the living expenses that had always been taken care of with your income. The sudden loss of financial stability can be devastating for a family already grieving.  Life insurance can be the final gift you give your loved ones to make sure they are taken care of after you are gone.

Is the main breadwinner of the household the only one who needs life insurance?

Many Australian families operate under the belief that only the main income earner needs life insurance. However, think about the impact of losing a spouse who has always taken care of the home and children. How would you get by without their contributions to the family? Would you need to hire childcare or place your children in day care? Could you afford to do that? What about maintaining the home? If you work, will you have the time and energy to maintain a safe and tidy home for your family?

When a loved one passes away, there is much emotional pain to deal with. Adding the burden of balancing all their contributions with your own responsibilities can be overwhelming at best. By making sure a life insurance policy is taken out for both heads of the household, the struggles faced by those left behind can be greatly minimilised and the family can work toward finding its way back to some sense of normalcy at a more natural pace.

Life insurance means providing your family with financial security and the preservation of a lifestyle you worked hard to establish.  No one wants to think about death, but let’s face it – life is unpredictable. No one is immune from illness or injury, no matter what age, how healthy, or how carefully they live their lives. Sometimes, things just go wrong.

Compare life insurance policies to find one that best suits your family’s needs and budget. You may be surprised to learn that life insurance is not as expensive as you thought; but the price a family pays when there’s no life insurance protection to cushion them after the death of a loved one can be insurmountable.

Visit the MultiCover.com.au website to learn more and compare life insurance and other types of insurance policies at your own pace, and at no cost.

Why it Makes Sense to Insure Yourself and Your Spouse or Partner

May 30th, 2012 by

Spouse InsuranceWhen it comes to purchasing personal life or disability insurance, most Australian families usually aim to insure only the major income producer in the household, while the stay-at-home spouse or partner is usually passed over for insurance coverage since it may seem like an unnecessary expense.

True, your family may very well face some serious financial problems if you were suddenly unable to earn an income due to serious injury, illness or death if it is your pay check that keeps the family’s bills paid, food on the table, and the children’s education costs funded. However, when it comes to the partner or spouse who takes care of the children and home, and performs additional duties that benefit you and the family, have you thought about what your family would do if suddenly he or she were unable to perform their daily duties due to injury, illness, or death?

Many families make the mistake of not insuring a non-working spouse or partner because they haven’t taken the time to consider the monetary value of the child care and domestic responsibilities they perform.

If your family were to lose the stay-at-home parent, have you considered what it might cost to bring childcare into the home, or to pay a childcare facility to look after your youngsters from 8 a.m. to 5 or 6 p.m. daily? What if one of the children became ill and needed to be home with an adult to care for them?

Additionally, have you considered the cost of hiring domestic help to come in and keep up with your household chores, meals, shopping, etc.? Have you considered the reality of trying to take all of this on yourself without help? In addition to working full time, you may be underestimating the toll it could take on you and your family at a time when you are grieving the loss of a partner’s health or life.

By comparing insurance policies to find those that provide coverage suitable for both partners in your family, you can secure the peace of mind that your family will be able to continue to operate without financial strain if the worst should happen to either you or your partner.

Life Insurance

Life insurance can take care of financial necessities by paying out a lump sum if you or your spouse or partner become the victim of a traumatic event or critical illness. Be sure you understand exactly what is and is not covered in your life insurance policy. If necessary, talk to a professional advisor regarding the best life insurance plan for yourself and your partner, and compare life insurance policies to make sure you are paying the lowest premium for all the coverage you need.

Term life insurance is often chosen to protect a specific asset, such as your home mortgage, for a fixed time period. You may, for instance, choose to purchase a 25-year term life insurance policy to cover a 25-year mortgage loan balance. If you or your spouse or partner were to pass away before the mortgage is fully amortized, your term life insurance policy can cover any remaining mortgage payments due, and after 25 years when your mortgage is paid in full your term life policy expires. A term life insurance policy may be best purchased when you’re young, since your insurance premiums can rise significantly as you get older.

Universal life insurance, on the other hand, is a policy with no expiration date, and which usually pays to your beneficiary upon your death. When both spouses carry a universal life insurance policy,  if one passes away the surviving spouse has a financial cushion to ease the transition whether the deceased spouse was working outside the home or taking care of the home and children full time.

Total and Permanent Disability Insurance (TPD)

Sometimes offered as an add-on to life insurance policies, total and permanent disability insurance (TPD) is intended to protect your family by paying a lump sum if you or your partner becomes totally and permanently disabled due to an injury or illness.

Even if your partner is not a breadwinner, most likely he or she performs a vital role in the maintenance of your household and caretaking of your children. While this type of insurance will replace your salary if you suddenly become unable to work and earn a living, if your partner is suddenly incapacitated it can provide the financial means necessary to hire child care and domestic help to perform the duties your disabled partner used to do.

Since the conditions of payment depend on the insurer’s definition of total and permanent disability, it is important to understand the fine print contained in the policy before you purchase. Again, seek the advice of a professional advisor to be sure you understand thoroughly the terms of an insurance policy before you sign, and compare insurance policies for the best pricing and offerings available.

Trauma insurance

Trauma or “critical illness” insurance is different from TPD coverage because it is designed to protect you and your family in the event that you are the victim of a traumatic event such as cancer, heart attack, stroke, or coronary bypass. Trauma insurance pays a lump sum upon diagnosis of a specified medical condition, money which can be used to help pay for treatments not covered by Medicare or your existing private health care plan, or for modifications of your home if necessary to accommodate medical equipment and improve access, or even a holiday to help promote recovery.

By including your spouse or partner in your trauma insurance plan, you both can rest assured that you are covered in the event that either of you becomes incapacitated. When a family member experiences a debilitating health crisis, it can be a tremendous emotional and financial strain on the whole family. Trauma insurance can help alleviate the financial strain, especially when recovery involves a lengthy and expensive recuperation period that may require the healthy partner to take time off from work to help care for the ill partner.

When choosing a trauma insurance policy for yourself and your spouse or partner, make sure to understand the definitions of the medical conditions covered by this type of insurance. Each policy will have its own wording, and you should be aware of each individual insurer’s specifications regarding the nature of symptoms, severity of the condition, and the extent of the disability.

Make sure to speak to a financial advisor if you have any questions or doubts at all about an insurance policy you intend to purchase, and even consider discussing the definitions of medical conditions with your physician.

Compare personal insurance policies to educate yourself on what is available and to get the best prices possible on all types of insurance. Visit MultiCover.com.au to view providers and policies and begin comparing today.

Choosing the Best Life Insurance for You and Your Family

May 25th, 2012 by

Choosing Term Life InsuraceMost Australians understand that they should have a life insurance policy in place, but too many put the decision to purchase life cover off for many reasons. One of the top reasons many avoid addressing their life insurance needs is lack of understanding; insurance can seem complicated, and there’s a fear of choosing the wrong life insurance policy, or perhaps of needlessly overspending on more coverage than you need.

The best place to start is from scratch. Educate yourself on the many facets of life insurance cover, beginning with the basics. You should never feel pressured to make a decision on any life insurance policy for any reason.

Below are some basic definitions you need to know when you’re ready to compare life insurance policies. Familiarise yourself as much as you can with facts regarding the definition of term life insurance, how it works, who needs it, and how much will you need. Visit MultiCover.com.au for a wide selection of life insurance policies and providers to compare.

Always discuss your insurance questions with a professional advisor if you have any doubts about the process. Your advisor will explain the differences in policies, and can help steer you toward the life insurance cover best suited to your individual needs.

What is Term Life Insurance?

Term life insurance is a personal insurance plan that pays a predetermined lump sum in cash upon your death. This lump sum is paid directly to the person you name as your beneficiary, usually a spouse, child, other family member or companion.

When you purchase a term life insurance policy, you select the payout sum that you believe would be needed to pay your financial obligations, perhaps the income you would have earned over time had you not passed away, and allow your family to live comfortably after you are gone.

Much like your auto or home insurance policies, you pay a monthly premium on your term life insurance policy, and you are covered as long as your premium is paid. If you discontinue paying your premium, your coverage will lapse. Term life insurance can be a smart and cost-effective way of securing financial peace of mind for your family in the event of your death, without the need to make an investment or commit your savings in order to be provided coverage.

Why Do I Need Life Insurance?

Try to imagine what would happen if you were to suddenly pass away. Your family would have to bear the emotional impact that the unexpected death of a loved one causes. But would they be additionally burdened by financial hardships without your income?  Consider your annual salary, and then multiply that figure by the number of years left before you plan to retire.

The total is most likely a considerable sum of money. By choosing to avoid buying term life insurance, you are in effect choosing to risk the remainder of your lifetime earnings value, and that represents the well being of your family – from paying the mortgage on your house to purchasing groceries, paying education and health care costs, and much more.

You wouldn’t risk quitting your job without another position already lined up – if you did, how would your mortgage and car payments be made, and how would your family get food on the table?  If you were to pass away unexpectedly, your term life insurance policy can offer the back-up protection your family will need to continue without you.

Unless you have accumulated a considerable amount of wealth that will take care of your family when you no longer can, term life insurance is possibly the only reliable way of planning for your family’s well being ahead of time.

Does my Spouse also Need Life Insurance?

Many Australians think that life insurance is meant for the breadwinner, most often the male head of household. But consider the ramifications if your non-working spouse were to pass away unexpectedly. Let’s consider that your non-employed spouse is female, and that she takes care of the home and children full time.

If she were to die suddenly, who would step in and take full time care of your children? Would they need to go to a day care facility or after-school care now that there is no full time parent in the home between 8 a.m. and 5 p.m.? Or, would you hire a live-in babysitter? Could you afford to?

If your non-working spouse took care of the chores, finances, and day-to-day operations of your family’s household, how will you manage it all alone? Will you need to take on a second job to cover new costs you hadn’t counted on, such as child care, housekeeping, and more?

Any time a loved one dies, there is tremendous grief and stress in the lives of those left behind, particularly when there are children involved. Adding a financial burden to an already difficult period can seem almost unbearable to those who must sort it all out and decide how best to move forward, for their own sake and the sake of the rest of the family.  Even though your spouse may not be working outside the home, be careful not to underestimate the contribution she or he makes to your family and household by keeping it functioning smoothly.

The loss of a non-working spouse can create a significant financial burden. By taking an honest look at their contributions and considering what you would need to do for your family, term life insurance protection  could be a good option for both of you.

Who Will Receive the Claim Funds and how are They Allowed to Use it?

The person that you assigned as your beneficiary when you purchased your term life insurance policy will receive the lump sum payment within a predefined amount of time following your death. There are no limits placed on how this money can be spent; the beneficiary, most often a spouse, is free to use the money as they deem fit.  The funds can be used to pay off your mortgage, car loans, children’s school tuition – whatever is most suitable for your family.

Having a term life insurance policy can be an investment in peace of mind. Discuss your options with a professional advisor, and visit MultiCover.com.au to compare life insurance policies and pricing.