Most families are carrying significant financial risk should the unexpected happen. The big question you have to ask yourself is:
‘Would your family be able to maintain their lifestyle if you died?’
If your answer to this question is no, you need to consider transferring that financial risk to an insurance company. The cost of that insurance might be very affordable if you shop around the better providers (see section below).
Your financial adviser can help you do that, as well as answer any questions you have about life insurance, and then calculate how much life insurance you need to safeguard you and your family in the event something should happen to you or your spouse.
And, if you wish, your adviser will use our sophisticated computer program to ‘broker’ the major insurers to find you the right cover at a competitive price.*
What is Life Insurance?
Life insurance pays a lump sum on the death of the insured, and in some cases earlier if the life insured is diagnosed with a terminal illness. The payout can be used for any purpose – typically it is used by beneficiaries to pay off debt, pay for funeral costs and look after the children’s schooling, and for the balance to be invested to replace the deceased’s salary to help maintain the family’s standard of living.
Life insurance can be very affordable if you ‘shop around’
Some insurance companies may charge you significantly less than other companies for the same cover, simply because they see you – or your occupation – as a lower risk. That’s why you should use a financial adviser who has the ability to ‘shop around’ the reputable insurers to get the best solution for your particular situation.
Here are a few examples of the low and high pricing from insurers for the same client using our comparison software which helps us to save a lot of money for our clients:
|Client situation||Life insurance sum insured||Lowest annual premium we found1||Highest annual premium we found1||How much we could save you p.a.1|
|Female age 35, doctor||$1,000,000||$321||$493||$172|
|Male age 30, tradesman||$500,000||$244||$430||$186|
|Female age 46, office manager – smoker||$600,000||$848||$1312||$464|
|Female Male age 52, solicitor||$800,000||$1528||$2293||$765|
1 Using our comparison software as at 3 April 2017. Stepped premium used. All quotes subject to standard underwriting. All premiums rounded down to the nearest dollar.
|3:36||On average, there is one death is Australia every three minutes and 36 seconds.1|
|1 in 2||The risk of an Australian being diagnosed with cancer by their 85th birthday is 1 in 2.2|
|Over 1600||Number of people who die on Australian roads every year, most aged between 26 and 56.3|
|Nearly 50,000||Lives claimed by cardiovascular disease per year. That’s 34% of all deaths.4|
*Insurance cover is subject to eligibility criteria.
1 ABS (2011) Population Clock, www.abs.gov.au/ausstats/abs, viewed 12 March 2012.
2 Australian Government Cancer Australia website April 2017.
3 Australian Government (August 2008) Road Deaths Australia: 2007 Statistical Summary, Road safety report no.1, Department of Infrastructure, Transport, Regional Development and Local Government, Canberra.
4 AIHW (2011) Cardiovascular disease: Australian facts 2011, Cardiovascular disease series no. 35, Cat. no. CVD 53, Canberra.
Disclaimer:This article is not legal advice and should not be relied on as such. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial advice relevant to your circumstances before making investment decisions. Where a particular financial product is mentioned you should consider the Product Disclosure Statement before making any decisions in relation to the product. Whilst every care has been taken in the preparation of this information, Australian Unity Personal Financial Services Ltd does not guarantee the accuracy or completeness of the information. Australian Unity Personal Financial Services Ltd does not guarantee any particular outcome or future performance. Australian Unity Personal Financial Services Ltd is a registered tax (financial) adviser. Any views expressed are those of the author and do not represent the views of Australian Unity Personal Financial Services Ltd. If you intend to rely on any tax advice in this document you should seek advice from a tax professional. Australian Unity Personal Financial Services Ltd ABN 26 098 725 145, AFSL & Australian Credit Licence No. 234459, 114 Albert Road, South Melbourne, VIC 3205. This document produced in April 2017. © Copyright 2017