Finding the Right Life Insurance Cover and what to look for….

Finding the Right Life Insurance Cover and what to look for….

If you are looking to purchase a life insurance policy and not quite sure where to start, follow these few very simple tips to help you make an informed decision and obtain a competitively priced policy with adequate protection for your needs:

Consider your life insurance needs carefully

The first key step in buying life insurance is to fully understand what it is that you are looking to protect and match those needs with the right insurance product. If you are thinking of a policy that will provide financial assistance to your dependants in the event of your death, then you may want to consider term life cover.

If you are looking for financial protection in the event of a serious illness or injury, consider bundling your policy with trauma (for life-threatening medical events) or TPD insurance (for serious illness or injury that have rendered your ability to work again). Trauma and TPD insurance are both living insurance, which means that you don’t have to pass away before a benefit payment is received. Many insurance providers these days offer options to bundle your term life policy with additional trauma or TPD cover, especially if you are looking for a comprehensive protection package.

Coverage for your income

On the other hand, it is beneficial to consider income protection insurance as an extra layer of protection on top of your term life policy. Income protection covers you for when you are ill or injured and cannot work temporarily, and provides you with a replacement income so that you can keep up with your financial commitments.

If you have a small budget to start off with, take the time to consider with life insurance product is most suitable to your current stage of life. Alternatively, you can also consult with a financial planner or an insurance consultant to guide you in the right direction. A consultant can utilise their knowledge of the market and find the best premiums for your policies and discounts.

Calculate the right amount of cover

Figuring out the appropriate amount of life insurance that you may need is another essential step to ensure you have the right protection in place. It is easy to overcompensate for how much protection you really need for your situation and end up paying far too much in premiums. On the other hand, not having enough insurance can put you and your dependants at risk of underinsurance, which could put your family in significant financial hardship in the future.

It is essential to use a needs based approach to make sure you find an appropriate level of cover to ensure your family is able to maintain their current way of living:

·         Mortgage or rent: If you own your home, put aside an amount to pay off your mortgage or the number of years you want to cover rent for your dependants;

·         Daily living expenses: Consider the day-to-day expenses that your family will have to meet, such as:

·         The cost of food

·         Buying groceries

·         Clothing

·         Utility bills; electricity, water, gas, telecommunication

·         Transportation

·         Home maintenance

·         Insurance premiums; health, car, home and contents insurance

·         Children’s education expenses: When putting aside an amount to cover your children’s education expenses, the number of children you have and their respective age should be taken into consideration.

·         Final expenses: There are certain expenses that your family will have to meet in the event of your death, such as medical bills (upon an injury or illness) or funeral costs. These expenses are often high and require immediate availability of funds. With life insurance benefit payment, you are making sure that your family won’t be out of pocket.

When in doubt, you can always ask for assistance from an insurance consultant who has the expertise and ability to advise you the appropriate cover based on your situation.

Compare multiple policies and read the fine print

To find a policy that offers adequate protection, it is essential to compare a variety of different policies from multiple providers. While the cost of the policy may be important to you, your decision should not be based solely on your monthly premiums. Taking this approach, you run the risk of being underinsured. Some life insurance plans may have different features, benefits and additional features that you can tailor to match your needs, which is why it is absolutely essential to read the policies’ Product Disclosure Statement (PDS) carefully. While some extra features and options may only be available by paying additional costs, you are making sure that you are protected should you or your family require that benefit if certain events occur.

Another important part of the PDS that you also need to assess is the policy exclusions. Understand the conditions of when the policy benefit is not payable. Failure to do so can affect the result of your claim. Ask questions to your insurance consultant if there are any terms and conditions that are not quite clear to you.

Choose a life insurance provider that can deliver its obligations to you

There are many life insurers in the Australian market these days and you want to make sure that the company you have chosen is able to fulfill its obligations to you or your beneficiaries in the event of a claim. There a few things that you need to look out for when comparing different insurance providers to choose the right one for you:

·         Reputation of the insurance provider in the market: It is essential to do your research on the company’s history, profile, and the awards they have won in the past. Reviews from other customers are often helpful to give you an indication of the company’s conducts.

·         Financial stability: Having the reassurance that your insurance provider will deliver what it has promised to do in the event of a claim cannot be based simply on blind faith. It is important to choose a company with financial strength that will continue to operate for many years to come. Some companies often make their annual financial reports accessible to the public, so that they are able to assess the financial strength of the company.

·         Customer service: Having a team of professionals to provide you with exceptional service and assistance when you need them to can make all the difference.

·         Claims process: Have a read through of customers reviews and complaints on their past dealings with the company at time of a claim. The process of a claim should be clearly laid out and straightforward.

Remember that life insurance is not a one-size-fits-all type of product. Everyone will have different sets of needs on what they require from their life insurance policies. Therefore, it is essential to gather and assess all the information you may need to help you make an informed decision on the life insurance policy that is right for you.

© AssetZ Group of Companies

Advice Warning
Any advice provided in this publication should be considered General Advice as it does not take into account your personal needs and objectives or your financial circumstances.  You should therefore consider these matters yourself before deciding whether the advice is appropriate for you and whether you should act upon it.
© AssetZ Group of Companies all rights reserved.

Advice Warning
Any advice provided in this publication should be considered General Advice as it does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate for you and whether you should act upon it.