Life insurance provides beneficiaries with a certain amount of money in the event of your death. In exchange, you pay a monthly premium which is determined based on your health history, gender, age and how much coverage you want. It is commonly used for funding a child’s education, paying off large debts such as a mortgage and covering the costs of your funeral and other final expenses.
Deciding whether you need to purchase a policy depends on how much income you expect to be lost when you die. If you have any dependents such as a spouse, relative you care for or children that rely on you, the money will assist them and prevent financial peril. Itâs also essential if you have a large estate or own a business.
When deciding to purchase life insurance Australia offers many options for coverage. Selecting a coverage known as human life vale or replacement income need is a method of selection that takes into account your salary, health benefits, retirement and personal services that you do such as child care or cooking. An alternate method of calculating how much is appropriate for your policy is the survivor needs analysis. This determines how much income is needed for your survivors to maintain the lifestyle theyâre accustomed to financially in the event of your death.
Save money on your premium by shopping around and comparing the levels of coverage each company offers and even selecting one available through your employer if possible.