In short
- Work out what your family would need for funeral costs, mortgage payments, living costs, education and outstanding debts.
- Consider your own circumstances, and review any existing policy as they change.
- Weigh level premiums, which start higher but are more predictable, against stepped premiums, which start lower and rise over time.
- Understand the exclusions: for example, a common one applies to suicide within the first thirteen months of a policy.
Buying life insurance is one of the most important things you can do for your family. It is a way to protect the future of your family financially when you are no longer here.
Your life insurance can help your family pay for their living expenses, debts, and other costs. Here are some things that you should consider in your decision about purchasing life insurance in Perth.
Related: Why Get A Life Insurance?
The Amount and Type of Cover you Need
Think about the amount of money that your family will need to pay for expenses. The different types of expenses can include:
- Funeral costs
- Mortgage payments
- Costs for food, clothing, and essential items
- Education costs for your children
- Outstanding debts
- Other expenses that recur
Your Own Circumstances
Every person’s situation is unique. The amount of coverage you need and the premiums you pay will depend on your particular circumstances. Circumstances can also change over time. Therefore, if you already have a life insurance policy, you may want to evaluate it to see if you need to update it to make it most beneficial to your current situation.
What Can You Afford?
There are two types of premiums to consider:
- Level premiums: these are fixed rates that will not change, but these typically start out higher. The advantage is that because the rates do not change, they are predictable. The disadvantage is that the higher rate makes it less affordable for someone starting out.
- Stepped premiums: these start at a lower rate and increase over time. The advantage is that it is more affordable in the beginning. The disadvantage is that the premiums go up as the years progress.
It is important for you to find the right balance between the premium that you can afford to pay and the amount of coverage that you need.
Policy Exclusions
Before you purchase a new policy, understand what types of circumstances or events that the policy does not cover, in which a claim would not be payable. These are called exclusions. For instance, a common exclusion may be that if you die by suicide within the first thirteen months of your policy, the insured amount will not payable.
Also read: Is It Legal To Have Multiple Life Insurance Policies In 2021?
Get The Best Advice On Life Insurance
If you would like more information about Australian life insurance, contact Greg at Absolute Insurance. They are a family business, so they understand the importance of protecting one’s family financially. They will help you find the insurance product that is most appropriate for your situation. With their advice, you will have peace of mind that you and your family are in good hands.
Related Posts:
- Things To Look For When Buying Life Insurance
- Is Life Insurance Worth The Cost?
- Different Types Of Life Insurance?
- How Much Life Insurance Do You Need?
Reviewed by Greg Maguire
Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.
Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.
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