While life insurance may not be a necessity for everyone, for those that choose to purchase a policy, the array of options may be dizzying and confusing. Considering the price you pay for a product that you may never use, it’s worthwhile to consider the benefits of each arrangement and only pay for what you need at each stage of your life. Insurers today offer several arrangements that make it easier for your to plan for your family’s finances should something happen to you.
Forms of Life Insurance
Straight life insurance offers coverage in the event of your death. The younger you are, the less likely that event is, and therefore the cheaper life insurance premiums tend to be. It is often recommended for people who are caring for others, such as the head of a family of young children, or a mother who may not bring in cash but whose passing could add significant expenses to the family’s upkeep.
Depending on your current income and your family’s needs, as well as the current stage you’re at in life, you should choose a benefits amount that suits you. If you currently hold investments or properties, you may choose a smaller amount for home insurance, even if you could afford a greater payout, because you’ll pay a monthly fee for the policy that will increase with the payout you choose.
Further Life Insurance Options
In addition to straight life insurance, there are many other options. What are their benefits and how can you determine if you need them?
Disability coverage: This covers you financially in the event that you can’t work due to an injury. This type of insurance has become very popular, because the financial outcomes of people who have experienced such injuries have been very negative. Employers frequently offer disability insurance packages where premiums come out of the employee’s paycheck. If you are the breadwinner in your home and being out of work could severely impact your family’s finances, this type of insurance should be considered. The younger you are, the higher your benefit amount, as the longer your family will need to cover the losses of your not working.
Children’s Insurance: This covers your finances should a child need medical coverage or specific expenses due to an illness, or in the case of a child’s death. To apply, the child must be between the ages of two and seventeen and be an Australian citizen. The benefit of this insurance is that in the event of such an illness, medical care can be adequately covered.
Serious Illness Cover: This covers you in the event that you can’t work due to a serious illness, such as cancer or heart disease. This benefit is an addition to an existing life insurance policy and is beneficial if you are older and still supporting family members, or if you’re at risk for a serious illness.
Accidental Death – The gives an added benefit to an existing life insurance policy should the policy holder perish due to an accident. The added benefit to the existing policy can augment the payout that your family receives and help with expenses that may ensue due to an unforeseen event – often when a death is unexpected, families have no plans in place for managing their finances.
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