Why Family Insurance is Important

Have you ever considered how you could pay the mortgage, school fees or general household bills if you were no longer receiving an income through an unexpected illness or injury? What would happen to you and your family if the bills kept mounting up on your desk but you didn't have the means to pay for them?

The solution to this often overlooked situation is Life Insurance. Life Insurance can ensure an unexpected tragedy is not further complicated by financial hardship.

A number of Life Insurance policies exist to ensure your finances are kept in check during your recovery time. These include:

  • Trauma Insurance

Trauma insurance, also known as critical insurance, provides a lump sum if the insured is diagnosed with a medical condition. These ensures that money is available to cover associated medical costs, debt repayments and living expenses.

The insured lump sum benefit is paid out upon diagnoses of a defined trauma condition and is not dependent on whether or not the insured is able to continue to work.

Trauma Insurance provides you with cover in the event of you're being diagnosed with one of these common medical conditions:-

  • Heart Attack
  • Stroke
  • Malignant cancer
  • Coronary artery bypass surgery.

It's worth noting that the lump sum payment provided on diagnosis is usually tax free, but trauma insurance premiums are not tax deductible.

  • Income Protection

Income Protection provides a monthly benefit for you to pay for the every day bills like your mortgage, groceries or utilities. This essentially provides you with the luxury of focusing on your recovery, without worrying about where the money is going to come.

Most income protection policies are flexible and can be tailored to suit your personal circumstances.

  • Life Insurance

Term life insurance or as it is sometimes known as low cost life insurance provides protection for a specified period at an affordable cost. The monthly premiums start off fairly low, but increase significantly from the age of 50. For this reason, if you require reasonably priced insurance for the long term you will be better off applying for a policy that has level life insurance premiums.

Level premiums are calculated on an average premium. This means that whilst you might pay more while you are younger, you in fact pay a lot less when you get older. Level premiums lock in the rate for the term of the policy, and most Australian companies provide till age 65.

Given the tough economic climate, a large number of people prefer to use their superannuation fund to purchase their low cost life insurance policy.

Unfortunately, most super funds do not provide good quality insurance benefits and in most cases you are able to roll over some of your super money to pay for your insurance policies. Please be aware that this is a specialist type of service.

As not all term life insurance policies are the same it pays to seek advice from a professional. So, give one of our friendly advisers at Rate Detective a call on 1300 793 143 and let them guide you in the right direction.

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Published on April 4-th, 2012 in Life Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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Important Information

Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.