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Life Insurance Guide

Life insurance provides a lump sum payment to your family in the event of your death or after a diagnosis of a terminal illness.

In Australia, life insurance protection comes in the form of term life insurance. This differs from whole life insurance (which is no longer available in Australia) in that it is taken out for a fixed period rather than the policy holder’s entire life. Life insurance can be purchased between the ages of 15 and 79 and the term usually ends when the policy holder reaches 99 years of age.

Term life insurance provides vital protection for the policy holder’s family by paying a lump sum in the event of a death. This enables surviving family members to meet financial needs including:

  • Ongoing income
  • Mortgage payments and any outstanding debts
  • Education costs

Your life insurance payout is yours to spend in any way you consider appropriate. There may be tax liabilities on a life insurance payment so it is important to seek professional advice before you spend any benefits you may receive.

How much life insurance cover does my family need?

Our basic life insurance calculator can help you determine how much cover you may need. There are number of factors to consider when deciding how much life insurance to purchase:

  • Outstanding debts
  • Daily living expenses. Don’t forget extras such as gifts and holidays!
  • Education expenses
  • Funeral expenses

For additional information see our guide on Understanding Insurance or contact one of our advisors today. We would be more than happy to help you calculate the exact sum you would require for your individual situation.

Who should own my Life Insurance policy?

This can be a complex issue and it is advisable to seek professional advice from a CCA Financial Planner and/or your Lawyer. There are 6 main factors to take into consideration when deciding who should own your Life Insurance policy:

  • Who is going to receive the money?
  • What is your employment situation and tax structure?
  • Have you an existing super fund and what type is it?
  • Do you have any previous relationships?
  • Does the money have to go to a specific person?
  • How will your insurance benefits be taxed?

For additional information see our guide on Understanding Estate Planning and our Understanding Insurance series.

How much does life insurance cost?

There are 6 factors that are generally into account when tailoring a life insurance quote to your individual situation:

  • Age
  • Gender
  • Whether you smoke
  • Amount of cover you need
  • Existing health
  • Length of life insurance term required

Consider the costs of not having life insurance. If something should happen to you, your loved ones may be forced to sell the family home or their education may suffer. We offer a free online quote facility which will compare a number ofAustralia’s leading life insurers to find the right policy for your unique circumstances.