Life insurance is fundamentally about protecting your loved ones and securing what matters most. It provides a promise that those we care about will be supported financially if we are no longer able to provide for them. In times of emotional distress, it serves as a source of stability and reassurance for families facing challenging circumstances.

What is Life Insurance 

Life insurance is a contract that provides financial protection for your loved ones in the event of your death. When you take out a policy, you pay regular premiums to an insurance company, which in return agrees to pay a lump sum, known as a death benefit, to your designated beneficiaries upon your passing. 

This money can be used to cover various expenses, including mortgage payments to help your family stay in their home, everyday living costs such as groceries and bills, outstanding debts like loans or credit card balances, and funeral expenses to ease the financial burden of arrangements. 

Life insurance is often regarded as a vital component of financial planning, particularly for individuals with dependants who rely on their income.

Term Life vs. Whole Life Insurance – Which One Should I Get? 

Term life insurance provides coverage for a specific period, such as 5, 10, or 15 years. It pays a death benefit to your beneficiaries only if you pass away during the policy term. This type of insurance is generally more affordable than whole life insurance, especially for younger individuals. However, once the term expires, you need to renew it, often at a higher premium. 

In contrast to term life insurance, whole life insurance is a permanent life insurance policy designed to provide coverage for the policyholder’s entire life, up to a predetermined expiry age or until canceled by the policyholder. This type of insurance is typically more suitable for individuals seeking permanent, consistent coverage

When deciding on what type is insurance for you, here’s a list of questions to consider asking yourself – 

1. What are your key concerns or priorities when thinking about life insurance? (e.g. affordability, long-term coverage, leaving an inheritance)
2. Do you have dependents who depend on your income? (e.g. spouse, children)
3. Do you have substantial financial obligations? (e.g. mortgage, debts)

Keep in mind that the ideal type of life insurance varies based on your individual needs and circumstances. Consulting a financial advisor can help you evaluate the advantages and disadvantages, enabling you to make a well-informed choice.

When Should You Buy Life Insurance? 

While the concept of life cover is straightforward, not all policies are created equal. Here are a list of factors to consider when selecting life cover and establishing your policy.

Age and Health Status 

Premiums are generally lower when you’re younger and in good health. Non-smokers may also qualify for lower rates. Some policies for seniors may not require a medical exam.

Dependents

Consider whether you have dependents, like a spouse or children, who rely on your income. Life insurance can replace your income and provide financial security for them in the event of your passing.

Financial Obligations

Assess your current financial responsibilities, such as a mortgage, credit card debt, and living expenses. Life insurance can help cover these obligations if you were to die or become terminally ill.

Life Events

Major life milestones, such as buying a home, getting married, or starting a family, often increase financial responsibilities. Life insurance can serve as a safety net during these transitions.

Existing Insurance Coverage

Check if you have coverage through your superannuation fund or other policies. You may be able to increase your cover through your super fund. If switching super funds, verify your coverage options, especially if you’re over 60 or have pre-existing conditions.

Policy Features and Costs

When comparing policies, consider benefits, coverage terms, exclusions, waiting periods, premium costs, and the potential for future increases. Always read the Product Disclosure Statement (PDS) carefully to understand what is covered and any limitations.

How Morgan Insurance Brokers Can Help

Let Morgan Insurance Brokers find and manage the ideal life insurance policy for you. Whether you’re weighing the options between term life and whole life insurance or need assistance choosing a provider, our life insurance experts are dedicated to delivering personalised solutions tailored to your needs.

We handle all the complexities of sourcing a life insurance policy, allowing you to relax and enjoy the peace of mind it provides. With our extensive industry knowledge, you can feel confident that you’re making informed choices for your financial security