- Many people recognise the importance of covering their assets in the event of premature death, especially when they take out a mortgage or other liabilities. However, most overlook the pressure that can be placed on their financial position in all the other areas, such as meeting their weekly expenses after the mortgage is paid.
- Having adequate personal insurance cover provides you and your family with financial protection in the event of unexpected death, illness, injury or a major health catastrophe (such as disablement, a heart attack or cancer).
- Consider the following:
- Do you have debts, such as mortgage, credit cards or personal loans?
- Do you have dependants? You need to think about their ongoing needs such as education expenses.
- Do you have children from a previous marriage? Blended families tend to create more insurance needs.
- Are you in a relationship and are you both in paid work? If your household needs two incomes to maintain your mortgage repayments and existing lifestyle, then you should both have adequate insurance cover.
- Do you have dependent parents? Something we often overlook is our responsibility to help care for our ageing parents.
- Do you have loose ends which need tying up such as money owed to family or friends?
Are you wealthy enough to be able to survive without your income? Could you maintain your current lifestyle on social security (Centrelink) benefits? Will your accumulated sick leave cover you for a long-term illness? If you are self-employed, you don’t have any sick leave, or work cover although that doesn’t cover the many more issues that can happen outside of the workplace. Could you maintain your superannuation contributions if you didn’t have an income?
https://moneysmart.gov.au/how-life-insurance-works/life-cover
https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance