If you’re a young mother with a growing family to manage, you most likely will not have much free time, and probably not enough free time to think about life insurance for your husband.
But if your husband is the main breadwinner, and he does not have adequate life insurance, what would happen to your family financially if he was seriously disabled due to illness or injury,
or even worse, dies.
An unexpected situation like that would leave many young families in severe financial distress and could mean you might have to work longer hours or return to work just to pay the basic bills. And childcare costs might also need to be factored in as a result of your changed employment situation.
This exposure to financial risk tends to be higher for the woman in a relationship because men are more likely to get sick and are more likely to die prematurely.
Don’t be part of the underinsured statistics
According to Rice Warner Actuaries1, a disturbing number of Australians are underinsured. The amount of life cover held is only half of the amount required to ensure that family members and dependants can maintain their standard of living after the death of a parent or partner.
Think about your own situation. If your husband’s income suddenly stopped, could you continue to pay your living expenses, mortgage, credit card interest, child care costs and schooling? Most young families in that situation would find their lifestyles quickly going backwards if the unexpected happened.
Getting the right insurance won’t break the bank
The good news is that adequate life insurance is not expensive. For just $34.40 per month, a healthy 40 year old male non- smoker can be covered with $500,000 of life insurance2. Such a payout could help cover the family’s debts, allow them to stay in the family home and continue with a reasonable lifestyle.
Similarly, for an extra $43.23 per month, the same person earning $70,000p.a. and with a waiting period of two months, could be paid 75% of their wage, or $4,375 per month, until he is well enough to return to work – or until age 65 when the policy ceases2.
If affordability is an issue, you could consider holding the policy in super to pay the premiums. That way your premiums won’t impact your husband’s take home pay.
And don’t forget it is possible to purchase an individual life insurance policy on someone else’s life – so if he won’t do it, you can!
1 Rice Warner Actuaries – Underinsurance in Australia – June 2011;
2 Based on AIA Australia Priority Protection product quotes issued 19 May 2014. Based on a 40 year old male living in Victoria – occupation category ‘AAA’.
Life cover premium includes policy fee. Income protection premium based on an indemnity benefit and 60 day waiting period. All premiums are stepped.