Life insurance is a contract between an insurer and you. It promises to give a certain amount of money to someone you choose after you die. Life insurance is an effective and popular way to provide your loved ones with financial protection after you’re gone.
Life insurance payout can help your beneficiary with immediate expenses after your death. These expenses may include funeral costs and medical bills. Additionally, life insurance can also cover ongoing financial responsibilities. This includes rent or mortgage payments as well as daily living expenses. It can also cover ongoing financial responsibilities like rent or mortgage payments and daily living expenses.
Typically, the first question most people have about life insurance is how much it will cost them and if they can afford it. With this in mind, this post addresses the question of how much does life insurance costs in Australia, which factors affect the price of premiums, and how you can reduce the cost of your life insurance cover.
The cost of your life insurance is determined by your circumstances and the level of cover you require. Here are the factors that influence the cost of life insurance.
Life insurance can be funded through your superannuation fund or personally. Before deciding how to pay for life insurance, it is important to seek advice. Using super to pay premiums can have significant tax consequences for your beneficiary
Default life insurance cost per month policies are generally a lot more expensive than getting a retail cover that is specific to your life circumstances. Group life insurance is the type of default life cover usually found within your superannuation fund. These covers usually cost more as they do not know anything about you prior to giving you some protections and could hold more restrictions at the time of claim.
Retail life insurance is usually cheaper and has better quality coverage. better? Why is something cheaper and better? Because your insurance is not combined with a large group of risks. Instead, the insurer learns everything about you, like your job and health, before giving you coverage. This process allows the insurer to offer better definitions at the claim as they know your pre-existing health/occupation risks and allows the insurer to be upfront about anything they may exclude from your contract.
In addition to the policy’s personal attributes, as outlined above, the cost of life insurance is also determined by the type of policy, i,e., accident only life insurance v whole life insurance v term life insurance.
Term life insurance cost is a policy that lasts for a specific amount of time, or term, which is generally 10 years. This is usually offered to people with pre-existing medical conditions. Then the insurer can choose to offer you another period for 10 years or more based on their assessment.
Accident only life insurance is a policy which covers you in the event of premature death caused by an accident rather than an illness. This cover is taken up by people who have a had significantly complicated health history.
Whole life insurance is a policy that covers you generally till you choose to cancel the policy. The policies generally expire at 100 years old, however, it is very unlikely you would be holding on to life insurance policies until that age. Most people will hold on to their whole life insurance policies until retirement, extinguish all their debt, have no more financial dependents, and a whole lot more reasons. Hence, it is important to have a tailored risk strategy in place to cater to your specific needs and balance the average cost of whole life insurance.
You can reduce the cost of life insurance by ensuring you:
After “how much is life insurance?“, the most common question people have is how much life insurance coverage they actually need; much like, the cost of life insurance in Australia, this comes down to your personal circumstances, such as:
You can learn more about how much life insurance coverage you’ll need and a quote for your premiums by completing this life insurance calculator
Guideline: Enter the desired coverage amount and the corresponding number of policies needed. Simply input these values and your information, the life insurance calculator will provide you with an estimate tailored to your specified coverage requirements.
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K Partners has a long history of helping clients in a wide range of occupations and with different financial circumstances, choose the best life insurance policy for their situation.
We’ll guarantee you get the right amount of coverage, receive the best contract terms, and purchase the cost-effective policy according to your exact needs.
For expert, impartial advice on life insurance or any other aspect of financial planning, contact us to book your consultation.
Please note that all the while the information provided above is factual in nature, it’s also intended to apply generally, and to a broad audience. Subsequently, the information hasn’t taken your personal circumstances or goals into consideration.