Life Insurance

As the old saying goes, there are two certainties in life: death & taxes. If these things are certainties of life it makes sense that every person should have two things: a good accountant & life insurance. If you are reading this currently, odds are you already have a great accountant but what is less certain is you having the correct amount of life insurance.

WHAT IS LIFE INSURANCE?

Life insurance is relatively self-explanatory. Your designated beneficiary receives a lump sum payout if you pass away. Majority of policies also offer a terminal illness payout, where if you are diagnosed with 12 or 24 months to live, your policy is paid out early.

Insurance in Super

Many Australian’s already have some life insurance through their superannuation funds. While this “default” insurance provides some cover, the amount is typically not enough for the average person with a mortgage. You also must be aware that this standard cover reduces overtime whilst increasing in cost. Holding insurance through super is a great way to ensure your family is covered while not impacting your day-to-day cashflow.

How much cover do I need?

Insurance should be tailored to your specific situation, which is why standard cover often falls short for many Australians. Generally, you want your life insurance to payout major debts (such as a mortgage). This helps reduce financial stress on the family after losing one of (or potentially the only) source of household income.  Some other areas to cover may include:
• Payout of additional debts
• Cover funeral expenses
• Provide a nest egg for the kids
• Establish a lump sum that can create an income for a non-working spouse or child

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Written by Matt Haggarty of Maxim Private Clients

Disclaimer: This material has been prepared without considering any potential investor's or clients objectives, financial situation or needs. This article is of a general nature and does not consider the individual circumstances of its recipients. Any information contained within this publication should not be misinterpreted as advice in any way. Please consult your financial advisor should you have any questions or concerns

Maxim Private Clients is a Corporate Authorised Representative No 1241929 of Futuro Financial Services Pty Ltd ABN 30 065 870 015 ASFL No 238478

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