Protect Your Family

What is Life Insurance?

The basic function of life insurance is to provide money in times of financial difficulty or crisis caused by the premature death, sickness, accident or age of a family’s primary income earner. For a small business, life insurance can provide immediate funds for the support of dependents in the event of death, without having to wait for the proceeds from the sale of the business.

 

A life insurance policy can provide income in the event of temporary or permanent disablement due to illness or injury.

 

Life insurance can provide a lump sum or income for dependents, sufficient to at least carry through the initial period of re-adjustment in the event of illness or accident. It can meet the final expenses, like hospital, legal and medical fees, and settle any outstanding debts in the event of death. These debts may be in the form of home mortgages, car finance and business expenses and loans.

 

Other considerations when purchasing life insurance include the provision of income to supplement retirement benefits, funds for education of children or some special purpose such as travel after retirement.

When purchasing an insurance policy, there are several questions that you should ask. Some are basic, others are complex, so you should choose an insurance company, agent or broker who will explain these details to you clearly and concisely. Ask about Superannuation, Annuity, Life insurance, and Disability Insurance. Ask what the annual premiums for a particular policy would be and whether you can afford it. Ask whether the long-term benefits are worth what you are paying for now.

 

If you intend to purchase an investment account policy, check the calculations on the basis of the actual rate of return. You may also wish to know more about the investment strategy for the assets backing the policy.

Find out the estimated death values after one, two, three, five, and ten and fifteen years, what the estimated maturity values are and if the policy can be altered later if necessary.

When you are asking questions, be sure to include questions about –

Ask how the rates apply to each policy and be sure to get a quote, in writing.

 

 

Income protection is for anyone interested in protecting his or her future income stream. Income protection helps the insured person most when he or she suffers an illness or accident and is not able to generate an income. Unfortunately, bills still need to be paid; despite the setback and this is where income protection insurance can bridge the gap.

 

With an income protection policy, you select the sums you want to receive should an accident occur and you are unable to work. This benefit will be payable up to a certain age, usually 65, and can be adjusted in accordance with inflation. Premiums are set in relation to your state of health upon application.

Superannuation ensures that an adequate and secure income will be provided for your retirement. A superannuation policy allows you to save now for your retirement years. In simple terms, this is a form of long term saving. You set aside part of your current earnings, which can then be placed in a fund and invested. The compounding interest effect means the comparatively small contributions accumulate to a surprisingly large amount over a long period. On your retirement, you receive either a lump sum or a pension.

 

Whether you are self-employed or a salaried employee, superannuation through voluntary and compulsory superannuation arrangements that receive concessional taxation treatment are recommended. Personal superannuation is still one of the most effective forms of tax-advantaged investment available.