Life Insurance: A Critical Part of Your Financial Plan

Being able to provide for yourself and your family is one of the most important things in life.

That’s why when the unexpected occurs, it’s a relief to have life insurance cover in place to know that you, your income, and your lifestyle are best protected.

Your financial plan is all about taking smart, proactive steps to reach your lifestyle and financial goals.

Being prepared for the unexpected will allow you to still reach your goals even after facing a financial crisis.

There are many circumstances that can put you or your family in a tough financial situation such as if you are in an accident and become injured or permanently disabled, or if you fall seriously ill and are unable to work for a period of time.

These unfortunate situations are exactly what life insurance is designed for – to financially protect you.

So why do so Many of us Avoid Buying Life Insurance?

Unfortunately, life insurance is often forgotten about or pushed to the side by so many Australians who could benefit from it. In fact, around 16 million Australians are underinsured.

While covers like car insurance and health insurance are extremely common and valued, life insurance is often avoided due to a number of reasons:

1. Affordability

The initial cost – or expected cost – of life insurance can often deter people. While the associated costs may seem expensive, the value it can provide in the form of protection and peace of mind significantly outweighs the cost.

Plus, when you consider having to live without a regular wage due to an illness or injury, the cost of personal insurance seems far more valuable.

2. Stressful

Purchasing an insurance plan also forces us to think about stress-inducing, fearful situations, like becoming disabled or passing away.

Selecting your level of cover requires you to contemplate the worst possible scenarios and not only think about them, but plan for them as well.

Some people are paralysed by fear and avoid the subject of life insurance completely.

It may not be enjoyable but putting in a small amount of effort now could save you a lot of stress in the future.

3. Complicated

Even though many of us understand the importance and value of life insurance, the complexity and confusing nature of the life insurance world can be off-putting.

Navigating the life insurance marketplace can be confusing and stressful. What’s more, is that it can be difficult to understand what is included in a policy and what is not. This may leave some people thinking there are more inclusions in their insurance policy than there actually are which may leave them underinsured.

Engaging a financial advisor can make selecting the right life insurance far less complicated. Don’t let a lack of understanding prevent you from developing a financial plan that accounts for all of your needs.

When Should you get Life Insurance?

Before you need it! Insurance isn’t very helpful if you get a policy after a financially challenging life change.

Unfortunately, you never know when that is going to happen.

Canstar recommends reviewing your level of cover whenever you experience a change in income or change in life stage¹.

So, when does the Average Australian Decide to Take out Life Insurance?

According to research from Finder², here are the most common moments in life when Australians decide life insurance cover is needed:

1. Having kids
2. Buying a house
3. Changes to financial situation
4. Getting married

Are you going through any of these common life events? Or have you already been through one of these without life insurance protection?

If you are wanting to prepare for unforeseen events and protect your financial future, consider seeking life insurance advice with the support of a financial advisor.

Cambio Group’s financial planners can help you determine the insurance solutions that will work for your lifestyle and financial situation.

Our experienced financial advisors can help you make smart decisions about your insurance cover and get the right cover in the first place. According to ASIC, an insurance claim through a financial advisor is also around 50% more likely to be successfully claimed.

We offer a complimentary initial consultation for new clients so you can feel confident that you are making the best decisions for your future.

Request your complimentary appointment today.

References

¹ https://www.canstar.com.au/life-insurance/when-should-you-buy-life-insurance/

² https://www.finder.com.au/do-you-need-life-insurance

Disclaimer: The information (including taxation) in this website does not consider your personal circumstances and is of a general nature only – unless otherwise stated. You should not act on the information provided without first obtaining professional advice specific to your circumstances.