Life insurance provides a lump sum payment to your family in the event of your death or after a diagnosis of a terminal illness.
In Australia, life insurance protection comes in the form of term life insurance. This differs from whole life insurance (which is no longer available in Australia) in that it is taken out for a fixed period rather than the policy holder’s entire life.
The purpose of this insurance policy is to maintain the family living standards and protect the assets of the family in the event of death.
A life insurance policy provides financial assistance in the form of a lump sum to your family or other dependents in the event of your death. The proceeds can be used to meet debts, such as the mortgage on the family home, and to maintain your family’s standard of living and the opportunities you may like to provide your children (e.g. education).
No price can ever be put on the value of a human life. However, life insurance is a safety net that allows your family to cope financially if you or your partner dies. In what would be an emotionally devastating time, life insurance removes one major stress – financial insecurity.
Term life insurance provides death cover only – if the life insured does not die within the specified term, by age 65 for example, the policy is cancelled and there is no surrender value. This type of policy has no savings or investment component – it is only a means of managing risk.
Ensuring you have adequate life insurance for your individual circumstances can be a difficult task. We can help you by highlighting areas to consider when calculating the amount of life insurance that you require.
Average family’s ongoing expenses:
- Mortgage
- Other debt repayments
- Bills
- Car insurance & expenses
- Medical bills and health insurance
- School fees
- Groceries
- Other living expenses
Having a life insurance policy gives you added peace of mind. It’s about doing something special for the people you love most in the world. It’s a way of protecting them financially if you’re no longer around to help.
The possibility of death before you turn age 65 is more likely than many people realise. The following table summarises the probably of Death and/or TPD for a 35 years old male or female before they turn 65 years old (from MLC Personal Risk Calculator which is based on Australian Life Tables 2003-05 with MLC’s TPD experience).
| Death & TPD | Death | TPD | |
| Male 35yrs old | 21% | 11% | 10% |
| Female 35yrs old | 13% | 7% | 6% |
That is, for a 35 year old male you have a 1/10 chance of being totally and permanently disabled before you turn 65. On top of this you would have an 11% chance of dying before age 65.
When you are borrowing or you have existing debts you should consider your insurance needs for you and your family.
If you would like more information, please Contact Us.