Life insurance and income protection cover

4 min read

The arrival of children into your life brings fresh responsibilities – and one of those is ensuring your family wouldn’t suffer financial hardship if you were to pass away unexpectedly.

The importance of insurance

It’s easy to think ‘it won’t happen to me’ but the fact is, everyone could become ill or injured, sometimes very seriously. That’s why life cover and income protection insurance could be so important. 

In fact, if you’ve got kids and a good-sized debt, like a mortgage, then you may want to consider the option of having insurances in place.

How much insurance cover do I need?

The idea behind life insurance is very simple. The person or people you nominate in your policy will receive a lump sum payout if you die. The hard part is knowing how much cover to have in place.

Think about your debts including your home loan, and how much your family may need each year to lead a comfortable lifestyle. Your level of cover should see your family able to live without a major disruption to their standard of living.

If you experience illness or injury that prevents you working, income protection insurance provides an income stream usually up to 75-80% of your regular wage or salary. It means you can focus on your recovery knowing your finances remain in good shape.

It's so important to protect the ones you love

Without life cover in place – or if you don’t have sufficient life insurance, your loved ones could face a very different lifestyle from the one they enjoy now if they are no longer able to depend on your income. They could be forced to sell the family home, your children may need to change schools – and all this at a time of immense personal grief.

Having appropriate life cover in place could alleviate the financial stress from your loved ones in situations where they can no longer depend on your income.

Your financial adviser can help you work out how much life insurance you need to protect your family.

Need help deciding how much cover you need? Contact us or speak to your financial adviser

Having insurance inside your super - pros and cons

There’s a good chance you have life insurance, and possibly income protection insurance, through your super fund. Should you stick with the level of cover you have through super, increase it or purchase insurance completely separate from your super or hold a combination of both? The answer depends on many factors and a BT Adviser can help determine the right options for you.

There is a commonly held belief that default life insurance through super is usually cheaper because the super fund buys the cover in bulk ('group insurance'). This is not always the case though. Many group insurers have increased their premiums in recent years. 

In addition, while most super funds have a default level of cover, it may not be enough for your needs. This is why it’s worth looking at directly held insurance to see if this is an option for you.

The key point is not to just accept the default cover that's on offer in your super. Do your homework. Be sure your family is protected.

Don't forget about income protection

Income protection insurance can also be taken through your super but it may make more sense to consider such a policy outside super if you can afford it. And it’s definitely something worth looking into. You may have to stop work if you fall ill, but the bills won’t stop rolling in.

Need help deciding how to arrange adequate life and income protection insurance? Contact us or speak to your financial adviser
Many of us don’t hesitate to insure physical assets such as our home, contents and vehicles, but what about our greatest asset of all – our ability to earn an income?
Why isn’t life insurance considered a priority to some when it comes to splashing the cash?
Stage of life 15 Aug 2016
Discover how some simple strategies can help protect what you have built up if you lose your job. It doesn’t have to be the end of the world – rather a new beginning.
6 min read
Stage of life 15 Aug 2016
You’ve landed a great new role. Now get your money matters in great shape by reviewing your super and putting a bigger pay cheque to work.
8 min read
Stage of life 15 Aug 2016
The end of a long term relationship can be emotionally devastating but it is possible to rebuild your finances and start afresh to thrive in your newly solo life.
6 min read

This information is current as at 15/08/2016.

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.

This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

Westpac Banking Corporation ABN 33 007 457 141, AFSL number 233714.