Life or death cover may be straight forward when it comes to the situations where a claim is paid. However, the purpose and the level of cover you should have may not be as well known.
What is the purpose of Life Cover?
On most occasions the fundamental reason for insuring your life is to make sure your family & loved ones are looked after financially in a time of significant emotional stress. The cover or potential capital from a life insurance payout can be tailored to offset the following:
1. Outstanding Debt – mortgage on the family home, investment property or other asset loan, vehicle debt. By extinguishing outstanding debt your family can remove financial obligations & concentrate solely on supporting one another emotionally through a traumatic time.
2. Lifestyle Expenses – a lump sum can be used to generate income for your family to live from, allowing them to maintain their standard of living (i.e. covering lost future earning capacity).
3. Education Purposes – a specific capital amount can be allocated for funding of children’s current or future education expenses.
The level of cover applied for will be directly derived from personal exposure & lifestyle choices of the items above, a discussion with a qualified financial adviser or risk specialist will help assess how much cover would likely be appropriate. If you would like to discuss whether you have adequate cover or what level of benefit may be suitable along with any other insurance queries please contact your local Accru adviser.
Author: James Grindrod
Accru Wealth Management Melbourne