There are compelling arguments that we can pose to anyone who asks, ‘Why should I get life insurance?’ Those reasons differ based on who you are. though, but we’ve listed the most important ones right here.
Typically whenever you face a big change in your life, it’s a good opportunity to take a step back and reflect on what you have. Here are some of life’s big ‘junctions’:
Each of these events triggers a drastic change in circumstances. Perhaps it’s a matter of more mouths to feed, or that you finally have money to buy a home. Whatever it is, it’s an opportunity to decide how these assets and family members will be looked after once you’re gone.
When you sign up for a life insurance policy, you can choose between variable age-stepped or variable premiums:
Variable premiums are typically more expensive than variable age-stepped premiums in the first few years, as the insurer attempts to spread the cost of cover over several years based on your age at the time of application. However, variable premiums can be cheaper in the long run, as premium increases tend to be smaller than age-stepped premiums.
It’s important to be aware that neither variable age-stepped or variable premiums are fixed, and it’s likely that premiums will increase over time if the benefit amount increases, the insurer updates their premium rates, discounts no longer apply or in response to government charges. Should your benefit amount increase, the cost of cover will be priced based on your age at the date of increase; this will generally result in a higher premium rate than you originally had.
To learn more about the different premium structures, you can refer to the Council of Australian Life Insurers (CALI) life insurance Premiums Key facts sheet. The options available vary between insurers, so it’s important to also read the Product Disclosure Statement (PDS) for details on what each insurer offers. .
Let’s take a look at the cost of raising children in Australia. As of 2013, NATSEM estimates that it costs $812,000 to raise two children. And this is the average cost, with private schooling tallying a significantly higher price tag; if that’s something you want for your kids.
Then, there are the typical living expenses we deal with each week.
And all of the above are just living expenses. What about trips to movies? Holidays? And what about looking after other relatives (e.g. parents, grandparents)? Making sure ageing dependents are cared for is just as important as looking after your kids.
Finally, you may have always intended to leave an inheritance for your family, so they have the means to do whatever they want to in life.
The average household debt in Australia stands at $245,000, as of December 2015.1 This debt doesn’t disappear when we die, though, it still needs to be settled. Can your family afford the debt you leave behind? Think about it, could they pay off your…
If any of the above reasons resonate with you, it might be time for you to learn the basics about life insurance. And, if you’re well-read on the subject, check out our life insurance quote comparison service.
The information provided here is general only and does not consider your personal objectives, financial situation or needs. Before you decide to purchase a product, it is important to read the relevant PDS.
