It is natural that as a parent you want to do everything possible to protect your family. Whether your family has grown by one or two or is still expanding, having dependents might make you think you are taking steps towards a safer future.
Family life insurance exists to support your family in the event of a tragedy. This additional protection for the spouse and children ensures that they will not have to worry so much about financial losses in the event of a loss, through a lump sum payment in the event of death or the diagnosis of a terminal illness.
What expenses does family life insurance cover?
Family life insurance could offer the insurance you need to ensure that every family left behind is treated once one of the main income earners has passed away. The loss of a person is distressing, and this is before considering the expenses that subsequently arise, such as the immediate costs and the subsequent costs of the domestic functions.
Immediate costs can include:
One less income to support the family
Hospital costs before death
Housework can include:
Expenditure for children
Domestic help for household tasks
Travel for children
When to take out family life insurance?
Life doesn't always go according to plan. In Australia, a death occurs approximately every 3 minutes and 19 seconds. Life insurance can provide coverage and peace of mind for your family in case the worst happens.
You could talk about founding a family or you may already have children. This moment of your life is full of exciting milestones, but these life events can put a strain on your budget. Family life insurance can guarantee a continuous quality of life for your loved ones in case of unexpected events.
Types of insurance for families
Various policies are available to meet your needs and your budget. Consider the circumstances of your family when choosing a supplier and a policy.
Some common policies are described below.
This concerns the death or diagnosis of terminal illness. Should any of these events occur, your family may be entitled to a lump sum payment of up to $ 10 million (subject to your financial requirements and the relevant Insurer's Underwriting Limits), which is usually tax-free. With iSelect, you can compare life insurance policies offered by our range of suppliers.
Insurance for children:
This relates to cases where a child dies or is diagnosed with a terminal illness or specific injury. Usually, you can take it as an optional extra with most life insurance policies. It is paid as a lump sum and can cover additional medical and educational expenses.
Total and permanent disability insurance:
This is an optional extra with most life insurance policies to deal with cases where you become permanently disabled and are unlikely to ever work again. This is also paid as a lump sum and can cover medical and educational expenses. Click here to find out more.
Serious Health Insurance or Trauma Insurance:
This coverage can be for a range of serious illnesses such as cancer, heart attacks, coronary artery bypass surgery and more. This is usually available as an optional extra cover. This coverage can also help with ongoing expenses associated with the disease. Click here to find out more.
What are the benefits of family life insurance?
Depending on the type and level of coverage you will receive, you will be insured for a variety of conditions. In general, this includes:
Serious organ failure
How to find life insurance suitable for you and your family
You may be wondering how to compare family life insurance policies and select the one that suits you best. Here are some considerations that may be useful for policy comparison. Be sure to read the Relevant Product Disclosure Statement of any policy you are considering buying:
What is indexing? Should you expect the amount of benefits to grow with inflation?
What conditions are covered? Is politics global?
What is the maximum sum insured? How much money will be paid if necessary?
How many children are covered? Will your whole family be covered if it continues to grow?
Considering your only family unit could help you when looking for adequate coverage. Additional considerations may include:
Your financial situation, both current and future
The age of you and your partner
Your work situation and that of your partner
Contributions to things like family expenses, debts and savings
The number of children in your family
How old are you to cover your children
Resources and retirement funds (you can use them to reduce the coverage you need)
How much do family life insurance premiums cost?
Your policy premium will be determined by a number of factors such as your age, lifestyle and the level of coverage you wish to obtain. There may also be financial advantages to taking out coverage first in life.
For example, when you are young and healthy, premiums tend to be lower. Younger families are generally entitled to a wide range of coverage options, including optional coverage such as permanent disability insurance and child insurance. Older families may find it more difficult to obtain coverage at an attractive price, although customers in their fifties can certainly request TPD coverage.
Looking for a life insurance policy? Compare with iSelect
With iSelect, you can compare the life insurance policies offered by our range of insurers to find a policy that's right for you. You can start by comparing the life insurance quotes online or by calling our friendly team on 13 19 20.
iSelect does not compare all life insurers or life insurance products on the market. iSelect therefore does not compare the products offered by life insurers that are not our partners. iSelect maintains an internal list of approved life insurance products that our consultants compare with all iSelect partners. We call it our "List of approved products". iSelect has commercial agreements with each of the partners. Click here to view our range of partners.
iSelect General Pty Limited ABN 90 131 798 126, AFS License Number: 334115. Any advice provided by iSelect is general in nature and does not take into account the objectives, financial situation or needs. You must consider the appropriateness of any general information or advice we provide to you, taking into account your personal situation, before acting on our advice or buying any product. You should consider the iSelect Financial Services Guide which provides information about our services and your rights as an iSelect customer. We receive commissions for every product sold.
Sources: 1. https://www.moneysmart.gov.au/insurance/car-insurance/comparing-the-cost-of-life-insurance/2. https://www.moneysmart.gov.au/insurance/car-insurance/add-on-insurance/3. https://www.moneysmart.gov.au/insurance/life-insurance/total-and-permanent-disability-cover/4. https://www.moneysmart.gov.au/insurance/life-insurance/income-protection/5. https://www.moneysmart.gov.au/insurance/life-insurance/