Life insurance

Determining how much life insurance you need takes a number of factors into account. It can include funeral expenses, mortgage or debt repayments, existing financial obligations, and an ongoing income stream for your partner. It must also take into account your personal wealth goals and current and future financial situation. So there’s a lot to take in, and we recommend you get professional advice when determining your level of life insurance cover.

It also depends on your beneficiaries’ needs. They may already have other income sources.

It’s useful to think about life insurance in terms of the amount that’s required vs the money your beneficiaries will already receive. The gap between these two is the level of cover you should be looking at.

The amount required covers those things mentioned previously, such as funeral expenses, mortgage, and ongoing expenses. The received amount covers other monetary streams, such as any investment income, your super fund payout, and any money stored away in savings.

There’s no one set age when you should look into getting life insurance. Instead, we recommend looking into life insurance advice and coverage when you reach a major life event, such as:

• Marriage, or divorce
• Having children
• Buying a home
• When you start to worry about illness, trauma, or permanent disability

While there are many options out there to compare life insurance options, costs, and levels of cover, these may not provide you with the full story. And when you don’t see the full story, you’re likely missing out on key pieces of information that can have big impacts on the level of cover your life insurance policy provides. This can even affect whether or not your life insurance policy even gets paid out — so it’s critical to get it right.

That’s why we recommend that the best way to compare life insurance policies is by speaking with a qualified life insurance adviser. They can help you to understand what’s necessary for your level of cover, and provide you with quotes from a selection of trusted insurance providers.

Life insurance premiums typically get paid out of your super account. While this means that your regular take-home pay won’t be affected, it also means that your super figure will receive constant debits. If you ever stop making regular super contributions, this means that your super amount will start to reduce.

Life insurance held within your super is an easier option. You can have regular life insurance payments made in a tax-effective way, without necessarily worrying about it — unless you stop working. Be aware though that for life insurance held within your super, you may not be able to access benefits until you retire.

Alternatively, a life insurance policy that’s held outside of your super is a more portable option. If you change employers, you don’t need to worry about setting up a new policy, and you can still receive coverage regardless of where you work. You’re able to access your benefits immediately. The biggest difference though is that you’ll make regular post-tax payments for this type of life insurance coverage.

So it really depends on your financial situation as to whether or not you choose to hold life insurance within your super. Your life insurance adviser can provide guidance on what’s going to work best for your situation.