Much has been discussed about private health insurance but has anyone consider life insurance? Not that we are able to benefit once we are dead, but it helps to cover debts, etc for our left behind loved ones.
I know the money could be put somewhere like an investment but I see it much like private health insurance, money that we pay every year but don't get anything out of it unless a claim is needed. Has anyone gotten one or experience claiming a life insurance?
I've always understood life insurance to be like this: although standalone policies can be very expensive if you take it out later in life (a few hundred dollars a month, and more as you age), at least your family will eventually get some of the money "back" when you're gone, unless you're lucky enough to live past 99. And although from an investment perspective that's not a great money strategy, you get peace of mind until you're 99. Is this how it works? Or are you just meant to cancel the standalone policy once your kids have grown up?
Life insurance is important when you have dependents.
Once you're retired it doesn't make much sense, what exactly are you insuring? If you die then it actually saves money, lol
Is there insurance that will conjure up some loved ones if I die?
Sure, it’s called love insurance
Collect the dragon balls!
Like many said life insurance needs vary from person to person and the life stage you are in.
I would say its worth getting enough cover to pay off debts (including mortgage if you have one) and then some for the family you may leave behind, but if you are 75 there is no real need for it, TPD is useful too.
If you're young, free & single, probably not for you.
If you have a family & mortgage you owe it to your loved ones to have it.
We insure our cars, home, health. What good is any of that if you are dead, or more importantly, if you lose your income (eg. If you lose your job temporarily or completely if you become partially disabled, or die).
So, I was advised, the most important things to insure are firstly your income and your life. Unless you are single, or married/partnered to someone who is completely loaded, chances are, if something happens to you - your partner/children, have no chance of keeping up with mortgages/working/raising children without your income/you being there.
I got income protection and life insurance before I had a child, but just had one 8 weeks ago and I clearly will never regret it if something ever happens.
All paid through my super, so go see an insurance broker to find you the best policy (they get commission, but do not charge you fees).
I have 3 policies. One through my super, one personally and my business buys one for each director.
Life insurance (and income protection, trauma, etc.) is complex.
A lot of policies have awful claim definitions.
I highly recommend speaking to a professional to get some advice before purchasing and never buy those awful policies you see on daytime TV like Real Insurance.
This is part of the type of planning that responsible adults do like a will, etc.
I took out income protection insurance after divorce with young children and mortgage. 10 years on had brain tumour that had me off work for 3 months and able to return working part time with cover for 5 years, during which no premiums were payable. Premiums became ridiculously expensive (due to stepped age increases) so only have through industry super limited to 2 year cover but now practically debt free so can ride out till retirement age. Kept Life insurance through super because would never have been able to buy with medical history but will be reducing to minimal at next review with financial planner now too.
It is only worthwhile if you have dependents.
Life insurance companies are there to make money. So they want the premiums to add up to more than the payout. Ceasing cover when you are likely to die (over 75, 99, etc) means you are making a bet with them. Dying young is the only way to win. I personally think you are better off arranging your affairs so that your dependents depend as little as possible.
Ensure your spouse can support themselves. Give your kids a good education or vocational training. Avoid excessive and bad debt, and pay off debt asap. This will also reduce the risk of your dependents screwing you financially, or sitting around waiting for you to die, or worse still hastening the event.
What if you don't have dependants but couldn't work bc of an accident? Wouldn't you need income to live?
Yes have the full suite of personal insurances (life, TPD, Income protection and trauma. My view on personal insurances is if there is a need have it. If your finances allow you to handle the event financially without it then don't have it.
For those that keep referring to their income protection held solely through their employer/industry fund type super please remember you do not own this policy it can be changed or cancelled on you at any time. Please also note the definitions of a policy that is solely owned through superannuation will by legislation have very limited definitions when compared to the better policies you can own personally. There is the option to have a split contract where the bulk of the cover is owned and paid through super but the bit (definitions) you are not able to have inside super and owned personally.
It really depends on your circumstances but my wife and i have always had life and TPD through our superannuation since we started work and have used a combination of replacement cover and transfers to keep it slightly above the level we need. Wife also has trauma cover outside of super and i have salary continuance outside of super. Will keep this in place until our youngest child finishes uni / tafe / starts work and then reduce.
I have suggested to my 19 year old daughter that she cancel the insurance in her superannuation until she reaches the point in her life where she has a partner / children / assets that make life insurance worthwhile.
No this how you get murdered
You should consider talking to a LICENSED financial adviser.
But in short things to consider before leaving out or taking up a life insurance and the cover level for TPD or life:
- dependants if any
- spouse
- debt level
- other assets / investments
- etc
I have seen a client who stopped paying life insurance but she has no debt and has >$8m in investments.
I also have seen other client with >$6m cover level in life insurance. Some because he has 5 dependants. Some because he still has millions in debt for leveraged investments paying premiums over $30k a year.
Many actually have already had life cover through super.
I'm with noble oak. They're cheaper for standalone than anyone else I looked at. It worries me a bit that as they're cheaper they look for ways to avoid payouts but I hope I'm wrong
I'm 35 and have a 1 year old and another on the way so I have no issue paying for it. I guess once we get to 55+ it's probably a different story though
I was considering Noble Oak, as they are the cheapest like you said. But I'm still shopping around.
Most ppl I think wouldn't be able to compare policies properly. Think comparing 5 to 10 PDSs and looking for the differences in definitions. Get advice!
Might be that their policy conditions are worse than the others e.g. pre existing condition or other exclusions but who knows. I used to work for the insurance part of a bank a few years ago and policy conditions vary very widely.
Never, my wife needs no extra incentive to end me!
You need to finish her!
I recently did a review of my insurances and ended up replacing my Life and TPD through my LegalSuper account with AIA, worked out to be cheaper for the amount I wanted to be covered. However, as I didn’t have much of a clue, I used one of those comparison websites (insuremeforlife) and found it super helpful.
Life insurance only needs to be taken out to cover your debts in case of death so your family is not left high and dry unable to pay the mortgage/loan.
Your marital assets including your superannuation should be sufficient to cover everything else.
essentially a scam - payout is almost impossible to get
About same as Funeral and Pet Insurance and typhoon insurance
Does anyone have income protection?
I did not plan to get one as my super has an inbuilt temporary incapacity benefit, with a monthly payout. This I reckon might be enough for my situation, but different people would require different needs.
Sorry haven’t read all comments.
Definitely through your super fund, lower premiums and cheaper source of funds.
TPD and income protection also important as you will incur expenses if you can’t work and are disabled.
Usually if not all the time cheaper = less likely to pay out
It's a waste of money like many insurances out there. Sure some insurances are a no brainer, but hey if you like making these companies rich then take out life insurance! Many would be much better off investing the money they pay for all these pointless nonsense policies. I talk to my relatives overseas, no one has these types of insurances, they all just get on with life if someone dies. That's what people use to do here until someone thought, oh lets sell everyone life insurance! easy way to get rich for insurance companies. Life isn't about insuring against every possible scenario which may occur, if you add up how much some of these insurance polices cost over 20 to 30 years, it adds up to a crapload of money which could have been spent elsewhere. Best life insurance is spending your money on eating well and gym equipment to keep yourself in great shape.
I have life insurance and recently looked at trying to move across to Zurich. I've previously suffered depression and had some breathing issues, they wanted me to go through sooo many tests. The premiums quoted to me for income protection insurance and life insurance were so expensive that I may as well just self insure by putting that monthly premium into an ETF..
Life Insurers are having a tough market in the low interest rate environment and then the pandemic. I would be waiting it out.
Some good and some very confusing responses.
Life insurance is one of the cheapest forms of insurance. It only gets paid out as a lump sum if a specific event happens (e.g. you die).
It is one of the most important insurances for anyone with a family as you set the amount of payout to be enough to give your family enough if you die. So enough to pay the mortgage out, and/or educate the kids, and give the spouse enough.
It can be cheaper if purchased through superannuation.
As you get older it gets more expensive, but you are likely to need it less as the kids are off your hands (hopefully) and the house is usually paid off.
If single it is probably not necessary.
Life insurance is not income insurance or trauma insurance or TPD. These are also important in some cases but you didnt ask about those.
You may not want to have life insurance but you better have a plan for your family/friends to handle your body after
I always shunned the idea of insurance because I never earned a lot and thought The money was better used in my life NOW. I have no debt except for some minor HECS (under 6k).
But for the last 2yrs I’ve been working in insurance in Canada (specifically group plans for doctors). I work directly with 2 advisors and have learned so much from them. I’ve also seen first hand the moments in life when you may need the coverage, especially dealing with Doctors during a global pandemic.
For the first time in my life, when I come home I will be looking for a non-commissioned insurance advisor to look at my best options for Long Term Disability and maybe Critical Illness. I’d be looking at these for ME in the even that something bad happens.
In the future if I buy a properly (chance would be a fine thing), then I’ll consider Life as well. I’ll Deff be looking at group policies with a future insurability option rider and call it a day.
I dont think the question should be IF you should get coverage, but HOW MUCH you should be covered.
If you have kids, especially young kids, then you absolutely 100% should have life and TPD insurance.
Just think how absolutely fu8ked their lives would be if anything happened to you - like literally you die this afternoon, what happens then?
From the insurers perspective:
Life, tpd are appropriately priced to cover the cost of providing the cover.
If money isn't being made with Ip, then it is currently under priced and you should expect the cost to go up at some point in the future to cover the average cost over the long term.
Or benefits will need to be scaled back