One of the most popular times to think about insurance is when you are getting married. Starting a new life with someone comes with all sorts of financial commitments, with one of them no doubt being how to support your spouse.
Insurance will offer financial security to your spouse should you suddenly pass away, or suffer an unexpected illness or injury, giving you peace of mind that they will not suffer hardship in the event.
Securing your family’s financial future, no matter what happens, is essential. Here’s how to start...
1. Get assurance through insurance
A recent Lifewise/NATSEM Underinsurance Report, revealed that 95% of families aren’t adequately insured, which means if the breadwinner becomes ill or dies, they can be left to rely on government assistance. Making sure you are adequately insured is one of the smartest ways to provide for your family. Insurance doesn’t just give peace of mind: Appropriate life cover can protect your family’s financial security, giving them one less thing to worry about at a difficult time.
2. Do it sooner rather than later
Insurance isn’t just for people who have partners and children. If you are young, fit and single, insurance can pay for your care if you are injured, in an accident or become seriously ill.
Taking out life insurance when you are younger can also make good financial sense. Policy costs increase as you get older, so it might be possible to lock in more affordable rates when you’re young and healthy.
Plus, if you take a policy out when you are strong and in good health, it has to remain in place even if you become seriously ill and difficult to insure. So, unless you are wealthy and have the means to cover your family’s financial needs if you aren’t there, it makes sense to be adequately insured.
3. Unpick the policies
Understanding the different types of insurance, and which ones are right for your circumstances, is a great starting point:
- Life Cover: Pays beneficiaries an agreed amount of money if the insured person dies.
- Total and Permanent Disability cover or TPD: Helps pay the costs associated with care and debt repayments if you are permanently injured.
- Trauma cover: Helps with the cost of treatment for a long-term illness or injury.
- Income protection: Provides money to replace income if you can’t work because of an injury or illness.
4. Count the cost
Now you know the different types, there are two things to consider when working out the level of cover you should take out:
a. How much can you afford?
There’s no point in getting into financial difficulties trying to pay high premiums. Work out your budget and how much you can divert into insurance. If you need help, seek professional advice.
b. How much money will you or your family need if you end up having to make an insurance claim?
List your crucial bills and financial commitments to give you an idea of how much your family will need to live comfortably. For example:
- Mortgage
- Childcare fees
- School fees
- Council rates
- Strata fees
5. Tick the legal boxes
Finally, if your insurance policy has to be used, it’s important to smooth the process by making sure you have a current Will.
While you can use a lawyer to draw up your Will, the Public Trustee in each state also provides a Wills service. Fees vary from being free in Queensland to being based on a sliding scale depending on the capital of your estate in NSW.
The Public Trustee can also help you with arranging power of attorney, which can be just as important as having a current Will.
Power of Attorney means you give an attorney the legal authority to look after your financial affairs on your behalf if you are no longer able to do so, for example, if you are too ill or injured to make decisions. It means someone can still access your funds and activate your insurance policies to make sure money is released to provide for you and your family.
To speak with one of our Planners about the insurance options available to you in light of your pending nuptials, please call 02 9524 6711 or email [email protected]
Source: www.colonialfirststate.com.au
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