Life is beautiful, but also uncertain. Whatever you do, and however hard you labour, you are never sure what life has in store for you. It is therefore necessary that you don’t leave anything to chance, namely, Life Insurance.
Deciding to protect those who depend on you with a sufficient amount of life insurance protection is a caring and responsible act. Life protection policies can provide those who are left behind with a lifetime of financial security.
What is Life insurance?
Life insurance is an insurance policy that pays monetary benefits to you or your dependents either after a set period or upon your death as the case may be. In realistic terms, it provides you and your family with the financial security and certainty to deal with the aftermath of any unexpected incidents.
Taking a life protection policy ensures that you and your family will receive financial support in the event you are not able to bring in the much-needed income yourself (may-be due to retirement, accident or ultimately demise).
Who needs a Life insurance protection plan:
Not everyone needs a life protection plan. But, if you have dependents, then the general rule is that you need one. The dependents can be anyone such as your spouse, children, aging parents, or a sibling who is financially dependent on you. The following situations signal a need for purchasing a life insurance policy.
a. You should insure yourself first, if you are the sole breadwinner of your family.
b. You have a spouse, children, domestic partner, aging parent, or a disabled relative- and your retirement savings and income are not enough to insure your dependents future.
c. You own a business.
d. You have a sizeable estate.
The key features of life insurance includes the following;
a. Affordable premiums based on the level of cover you require and budget.
b. Easy application process as it does not require any medical or blood tests.
c. The level of cover often depends on your age.
d. Upon signing the policy documents, you will be covered immediately.
e. Flexible payment options- monthly, quarterly, half-yearly or annually.
f. They pay a lump sum of money to your family or chosen beneficiaries in the event of your death
g. Apart from death, the majority of policies will also make a payout in the event that you are diagnosed with a terminal illness.
h. Some policies also include accident injury benefit.
i. You should be at least 18 years old; You are an Australian citizen or a permanent resident of Australia.
Types of policies:
Term life insurance plan is the most common type of life protection policy available in Australia. Some other types of life protection plans people often consider are the child life insurance and critical illness insurance.
a. Term life insurance: It is the most easily accessible and cost-effective form of insurance that suits almost every person and their needs. This type of insurance gives your loved ones freedom and financial security when you are no longer around. Term insurance pays up a lump sum of cash on death or diagnosis of terminal illness to your dependents or chosen beneficiary.
This insurance policy is very affordable when you are young and reasonably healthy. In this type of insurance plan, your cover remains until you reach the age of 99.
b. Child life insurance: It is not just adults or the elderly who suffer from critical illnesses, but also small children. In such cases the financial consequences of taking care of a child are very severe. With child life insurance, the insurer pays a lump sum of money in the unfortunate event of the death of your child, or a child who is diagnosed with critical illness, or is suffering from a specified medical condition.
c. Critical illness insurance: It is also called recovery or trauma insurance, which is designed to give you the financial freedom to concentrate on your treatment or recovery without having to worry about the cost of everyday living.