Do I need life insurance?

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Protecting your family and assets


Life insurance is an essential part of managing your financial health.

Whether you are independent or have a family, life insurance can help provide you with financial protection if you are unable to work due to injury or illness.

Not having enough life insurance may put you and your family in financial uncertainty. The risks of not having insurance or being under-insured may include:

  • not being able to pay school fees or the mortgage if you are unable to work for an extended period
  • having to cut short your recovery time from an accident or serious illness to return to work earlier than you might have done otherwise
  • having to sell the family home or other assets if you or your partner becomes seriously ill or dies.

When considering the level of life insurance and types of insurance protection you may need, you need to assess your personal circumstances both now and into the future.

Not having enough life insurance may put you and your family in financial uncertainty.

You should discuss your insurance needs with your financial adviser. Before you do, it may help to try to answer questions such as:

  • what are the potential financial consequences for my family if I have a bad accident, become seriously ill or die?
  • do I enjoy activities with a high risk of injury, such as snowboarding or rock climbing?
  • how is my health now? How is my partner's health? Are we predisposed to any diseases?
  • how much do we owe on the house? What about other debt?
  • even relatively minor accidents can take their toll. Will the family be able to pay for bills and food if I'm unable to work because of a broken bone, for example, or need to take a few weeks or a couple of months off work due to illness?
  • can I afford to give up work if my stay-at-home spouse becomes ill or injured and is unable to care for our children?

It's important to re-assess your insurance needs periodically to make sure they are still appropriate for your circumstances, particularly after your circumstances have significantly changed, for example, having children, taking on more debt or if your income changes.

Many people rely on the life insurance policy provided by their superannuation fund. If you're unsure whether this policy provides you with adequate protection or whether you will be able to access your insurance proceeds when you need them, make sure you speak with your financial adviser.

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