What you need to know

Finding the right protection for you and your loved ones can be mind-boggling, and a simple misunderstanding could be costly. Which is why nothing can replace the value of the professional advice provided by a financial adviser.

In addition, we’ve put together some simple answers to common questions to help guide the discussion with your adviser.

Determining the level of cover you need, means thinking about both the immediate and longer-term expenses your loved ones would face if you passed away or were unable to work.

This includes:

  • How many people are dependent on your income?
  • How old are your dependents and how long will they need to rely on your financial support?
  • How much of your income is used to pay day-to-day living expenses and how much is used to make debt repayments?
  • How long could you and/or your loved ones manage on savings, paid leave, a second income or other available funds?
  • Do you have savings or a second income to help cover the cost of medical treatments, time off work if your child is sick or lifestyle changes if you needed it?
  • What future expenses would you like to take care of such as education costs or retirement?

Many factors determine the cost of life insurance including the cover type you choose, the cover amount you need, your age, health, occupation and hobbies.  Any pre-existing medical conditions may also impact the insurance premium you pay. 

There are generally three ways that you can purchase life insurance:

Directly from a provider

If you know your cover needs and are confident about your knowledge of the insurance products you wish to purchase, then buying insurance directly from a life insurance provider can be a simple and fast way to get covered.  It may also mean that you’re not required to provide detailed information about your health or financial situation. However, it’s important to note that this type of cover can sometimes be limited. Direct insurance providers often employ a ‘one size fits all’ approach which doesn’t consider your individual circumstances in detail. This means that the cover you purchase may not offer the benefits and features that are available with a comprehensive insurance plan sold by a financial adviser.

Through a superannuation fund

Many Australians have some life, TPD and/or income protection cover provided by their superannuation fund. However, it’s important to consider if the type and cover level provided is appropriate for your needs. For example, critical illness insurance, also known as trauma insurance, is not available through a superannuation fund. There are also often limits on cover amounts and how long an income protection claim will be paid for. The trustee of the superannuation fund may also impose restrictions on how, when and to who the insurance claim is paid.

With the expert assistance of a Financial Adviser

A financial adviser will work with you to understand your individual circumstances, as well as your personal and financial goals. They will then tailor an insurance plan that ensures you and your loved ones have the protection that’s right for you. They will answer questions specific to your circumstances, guide you through the application process, and be available to review your cover needs over the longer term, as your individual or family circumstances change. Importantly, should the worst happen, they will also be there to assist with the claims process.

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