Life Insurance

[babyflash]

Hi Bubhubbers,

Dp and me are buying a house and have decided the time has come to cover ourselves so that if (god forbid) something should happen to one of us then the other one isnt stuck with a heap of debt if you know what i mean.

My question is do any of you have it and if yes who with i wouldnt know where to start looking.

Sorry if this is to personal or in the wrong place.

Thanks :)

[kelbel]

Hi,
Its probably a good safety net for yourselves to have. My husband has a policy to cover the house (it gets paid out) and then we get a weekly allowance for a certain amount of time (2 years i think).
If you google life insurance, check out the different groups that offer policies and see what a good deal is.
I will post some more information on what you will need in your contract. It had a bit about choice magazine on what to look for.
Goodluck.
Kel:detective:

[kelbel]

Buying guide: Life insurance
How to assess your life insurance needs.
Online 06/05

Contents
Life insurance
Types of cover
What insurance do I need?

Super fund cover
Tips and traps



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It’s probably not something you like to think about, but if you became seriously ill and were unable to work, would you have enough savings or insurance to deal with the financial consequences? If you died, would your family or other dependents cope financially?

For many people, the answer is no. A recent study reported that:

less than one in three people surveyed (aged 18-59) had a personal life insurance policy,
one third only had cover provided with their compulsory super (and they may not buy a sufficient amount), and
the rest had no life insurance at all. Which category do you fall into?
With life insurance often seen as an important part of a comprehensive financial strategy, now’s a good time to find out and assess what cover you need.

Death cover Total and permanent disability
Death only pays a lump sum to your nominated beneficiaries if you die (causes like accidents or illness are usually covered, but suicide within a year of the policy’s commencement won’t be covered). Most policies are term insurance (see below).
Total and permanent disability (TPD) — a lump sum is paid if you’re permanently disabled before you retire and unable to return to work (self-inflicted injuries or disablement following a war or rebellion may be excluded).

Income protection Critical or serious illness
Income protection (IP) can pay 75% of your salary for a while if you’re temporarily unable to work because of sickness or injury. The length of time you receive payments depends on the contract term; for example two years, five years, or up to age 60 or 65.
Critical or serious illness also known as trauma insurance, pays a lump sum if you contract a specified illness. Policies cover up to 30 conditions; most claims arise from cancer, strokes and heart attacks. While claims relating to death insurance should be pretty clear-cut, the other types of ‘living’ insurance have lots of terms and conditions. You need to do your homework, understand policies and you may need independent financial advice.




‘Life insurance’ is a catch-all term that generally refers to both ‘death’ and ‘living’ cover. There are four main variations.

Term or whole of life?

Most death-only policies sold now are term insurance which pays a lump sum to your dependents if you die. It covers you for a specified time or until you reach 65. Annual premiums increase as you get older.
Whole of life policies combine insurance with an investment component; premiums stay level for the duration of your policy. When the policy matures you receive a lump sum. Whole of life policies are much less common now; they were often expensive (premiums could be 10 times the price of term insurance with some agents receiving very high commissions for selling policies).
Term insurance is simpler and cheaper for most people.

A young single person with no dependents probably doesn’t need death cover, but might consider income protection (IP) or critical illness insurance.

In fact you may consider insurance for the costs of living more important than ensuring family members get a payout after your death. More people are surviving serious illnesses and rehabilitation and care are expensive.

How much do I need?

Do you have a mortgage and other debts?
A spouse, children or other dependents?
Assets and investments?
What are your current and expected future earnings?
There are generally two main considerations:

Insurance to cover your debts so they’re not passed on to your family and
If you’re the main breadwinner in your family, insurance to provide an income stream if you can no longer work.
According to industry ‘rules of thumb’, people should have:

Death cover of around 10 times their annual salary (this could cost around 0.5% to 2% of your gross salary per year) and
Income protection cover for 75% of their earnings.
Shop around and compare insurers’ cover and prices (including your super fund); they can differ greatly.

Insurance prices

Premiums are set depending on:

Age (premiums may increase or cover decrease as you get older)
Gender (women generally live longer than men so pay lower premiums for death cover, but more for IP due to higher claims)
Health and pre-existing conditions
Whether or not you smoke
Occupation (for example, a manual labourer pays higher premiums to an office worker) and
Waiting period: the time you choose to wait before receiving payment.
Prices vary depending on age and other factors, but:

Death cover can cost around 0.1% of the amount insured (so somebody on $50,000 per year might pay $500 a year for $500,000 cover), while
Income protection can cost around one week’s salary per year (premiums are generally tax deductible).



With some policies, premiums are set at the start and won’t change. In other cases premiums are indexed or reassessed at later renewals. See Tips and traps for more.

This isn’t an exhaustive list (exclusions are rife in life insurance) so compare product disclosure statements and consider getting professional financial advice.

When buying life insurance, ask these key questions:

What’s covered?
What’s not covered?
How much will I be paid after a claim? and
What will the insurance premiums cost now and later?

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Consider getting a policy with index-linked premiums and cover so you know the cover will keep up with inflation.


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Consider a non-cancellable policy; otherwise companies may reassess your health or other factors on each renewal, possibly raising your premiums or refusing to continue cover.


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Offset clauses allow most insurers to reduce payouts if you have other income (for example, sick pay from your employer or Centrelink benefits). Check the relevant section of the policy for details.


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Group insurance through super: the agreement is between the fund trustee and insurer. Make sure both know who your nominated beneficiaries are.


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TPD claims already paid to you will usually reduce the amount paid out when you die.


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With IP, TPD and trauma check the waiting period (how long before you receive payment, often 30 or 90 days) and the benefit period (how long will payments be made — typically two years or sometimes until your normal retirement age).


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Some IP policies pay out if you’re unable to perform your normal occupation; others only pay if you can’t perform any occupation for which you’re suited by education, training or experience.


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Critical illness: check policy wording to see what medical conditions and illnesses are covered. Some conditions aren’t covered for the first three months and you may not be covered for elective surgery.


I hope this is of some help. I have been looking at my husbands in the last few days to make sure we are properly covered, so goodluck!:smiliedance:

[Roxy]

Dh has life insurance - I don't as yet, but it's probably something that we will look at soon.

His is with Tower Life Insurance, and he has $500 000 worth of cover (for us, that would pay off the mortgage so that the kids and I had somewhere we owned to live, plus any extra debts and have some left over). It costs under $30 a month.

[Minke]

We have life insurance, TPD (both $300K) and income protection through MLC - costs $85/month (income protection is claimable on your tax). He also has $300K through his super, which costs a few bucks a week.

[LittleBoysRock]

DH has life insurance and TPD insurance with MLC. I think it costs us about $30.00 p/month.

[MrsMiggins]

If you and/or your DP are currently working, check out your super fund. You may already have cover. If so, you should check to see if you need to update it so that you are sufficiently covered (you might need to see a Financial Advisor, your super fund could possibly be able to arrange one for you, just ask).

If you don't currently have cover through your super fund, it is often worthwhile looking into it if it's available, as your premiums are deducted from your fund - no out of pocket expenses.

[babyflash]

Hi everyone :wave:

Thanks for all your replies i will be sitting in front of my computer tomorrrow with Dp and start looking at how much cover we need the best deal etc etc.

Its so great to have the opinions of people such as yourselves who have already been in this situation & are kind enough to help me :yes:
I really appreciate it :hugs:

Hope to see you round the threads :)

[GirlGerms]

We've got a fantastic insurance broker, who knows I hate throwing money at insurance, and here's what he told us to do:

Ramp up your insurance via your superannuation fund because it's the cheapest pre-tax premium you will pay.

We've just got our death and TPD (Total and Permanent Disablement) through our respective super funds.

It's important to know that most (if not all) super funds will only cover you for income protection for up to two years. We have got a 'top-up' fund which covers us for 75% of our income (including super) and increases annually in line with CPI until we're 65 years old.

We also have 'Trauma Cover' of $60,000 which covers a range of serious health problems (most cancers etc). This would cover time off work etc. This increases annually.

Personally, I think it's important not to over-do insurance because we literally insure every aspect of our lives. It's good to have a nice balance if you ask me.

GG

[subaruforestermum]

I have cover through my Superfund, and also through my union fund!!!!