Experienced financial adviser discusses the importance of life insurance
Almost 80% of Australian families have miscalculated life insurance to cover their needs. FMD Financial Adviser, Mike Reynolds, outlines the importance of having the correct amount of life cover in super.
Why Having A Life Insurance Policy Is Important
A lot people have strange ideas when it comes to life insurance. Believing that it is wasted money since they won’t see any benefits themselves, they choose to omit purchasing any. Other people cancel their existing policies thinking that they will be able to reinvest this money elsewhere to become more financially stable.
Both of these ideas are mistakes that many people regret making later on in life. Should the worst happen and they die without having an insurance policy in place, their families will pay the price for this decision. To understand why canceling a policy or not purchasing one is a mistake, consider these reasons why life insurance is important.
After a death, the family members will receive compensation when a policy is in place. This amount is generally more than what was paid out in premiums. Life insurance means that the cost of a funeral and related medical expenses will be covered. Your family will not have to dig deep into savings to cover these costs.
Because of the life insurance payout, your surviving family members will be able to live the life that you wanted for them. In short, a life insurance policy allows you to take care of the people that you love even after you have gone. This is not the case for people who have chosen not to carry a policy.
Getting the Right Life Insurance Policy
To ensure that you have a large enough policy, do some calculations. Find out how much a funeral costs in your area and figure out the cost of health copay requirements. The minimum cover should be enough to provide enough money for these expenses plus provide an additional amount to help your family get through the first few months without you and the income that you have provided,
Instead of revoking a life insurance policy because it is more costly than you can afford, why not look for a better rate with Life Insurance 360. Check out other insurance companies to see how much coverage would cost you. It’s worth a look when you start thinking about how much some financial help would mean to your dependents.