Purchasing life insurance can be one of the greatest gifts you can give to those who matter most in one of the most difficult times of their lives. To leave something behind is something we all strive for, but how do we know if we are doing it correctly? Life insurance policies can be tricky to understand, so we wanted to explain a few things you should look out for if you’re considering purchasing one. There is no doubt of its importance, but everyone must make sure they are getting exactly what they want.
What we all want from our life insurance
The concept of life insurance is simple. It can give us peace of mind knowing that those we love are looked after and any debt we leave behind isn’t passed down. Almost every Australian has felt the impact of inflation, so it is crucial to not add our financial burdens to those we love. However, it is of the utmost importance to not skim the details on our insurance policies and know exactly what will be covered should it come to the worst.
How to identify a tight life insurance policy
Firstly, it is a good idea to know exactly what you are looking for, what you need, and what you can afford. A good insurer or broker will be able to talk you through the finer details, but to give you an idea, we have compiled a list of what we think should be included in everyone’s plan.
Death: Although nobody likes to hear the word, this is exactly what life insurance is for. You may think it is too obvious to include in our list, but it is imperative to study the terms as some insurance companies might not cover certain eventualities.
Terminal illness: This feature can be a godsend. If the insured person has been given a limited time left to live, they will receive a payout to help them get their affairs in order, taking the stress off any loved ones left behind.
Funeral Advancement: Another massive expense can be funeral costs. It is definitely worth upgrading a policy and making sure this is included. The payout will cover all immediate funeral expenses.
Indexation: This is another feature that you shouldn’t be without. Indexation is when the insured amount increases every year. It will either increase with inflation or an agreed percentage. This means that whatever is left behind will always be a good sum.
At the end of the day, life insurance is something we should consider if we haven’t already got it. Of course, many Australians will have some form of life insurance on their Superannuation, but often, that might not cover what they really need. Depending on your financial obligations, age, health, dependents, and existing coverage, it is certainly something worth checking out. There aren’t many things that can give you this kind of reassurance.