Life Insurance
Protecting your loved ones is a natural instinct, but how can you protect them if you're not around?
Life Insurance helps to protect your family in the event of your death or on diagnosis of terminal illness. It provides your beneficiaries with a lump-sum payment in the event of your death or on diagnosis of a terminal illness with less than 12 months to live and could be used to meet the following needs:
- The family’s ongoing income needs
- Mortgage and other outstanding loans that you can pay off
- Children’s education costs
At BluePrint Advisors we can assist you with tayloring a complete life insurance package to protect your family's financial future. Discuss your needs with us today!
Source: Clip supplied by CMLA ABN 48 123 123 124 AFSL 234945.
The information is of a general nature only and is not specific advice.
Life Insurance wordings
On the surface, all Life insurance policies may appear the same (ie. it will pay out in the event of death). But did you know some policies have automatic exclusions on accidents, illnesses or death that occur overseas or whilst you are on holidays outside Australia?
Another common misconception is assuming that Life insurance inside super is sufficient. But did you know that it is extremely common for industry Super funds to charge you a fixed weekly premium yet reduces your levels of benefit over time? (ie. at age 30, you pay $5 per week for Life insurance of $200,000. At age 64, you still pay $5 per week but your actual Life insurance benefit may be less than $1,000)
Understanding the wordings on your Life insurance policy is crucial. It could mean the difference between a sustainable financial future for your family or a dispersion of your family's assets. Don't leave it to chances.
Types of Life Insurance premiums
As with all insurances, cost is a major factor preventing many people from accessing quality insurance package. Whilst cost is unavoidable, it can be minimised. Understanding the types of insurance premium options and when to switch between premium types is key to minimising insurance costs.
Stepped premium increases each year in line with your age. This is due to the perceived health effects on people as they aged and is treated as extra risk for insurers. Stepped premium is the most common form of premium option as it is the cheapest option available in the short term. However in the long term, stepped premium may be unsustainable as it can increase exponentially.
Decreasing cover premium option is where the premium stays the same each year while the benefit reduces. It is very difficult to keep track of how much benefit you have as your benefit is dependent on how much your dollar is worth tomorrow. This type of policy is what you generally get with most industry super funds, which is not the best solution for most people.
Level premium to age 65 is generally the best way to buy your cover for the long term. Your premium will stay the same regardless of age and the Insurer cannot increase your premium even if you claim. Some insurers also offers level premium to age 70. With level premium you know exactly how much you're insured for and how much it cost for the life of your policy.
Understanding that Life insurance is for the long term and is your "plan B" is crucial to planning your family's financial future. Talk to someone about your options and planning ahead is key.
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