Term life insurance (life Insurance) is an insurance cover that provides a lump sum monetary payout to the beneficiary or the estate of the insurance policy holder upon death and if a terminal illness option is included under the policy a payout can be made if the insured person is diagnosed with a terminal illness which will result in death within 12 months.
Whilst we all hope that you don’t have to call upon this type of insurance it's also very important that you decide on the appropriate level and type of cover that you will need. You may also want to seek the advice of a qualified professional.
A claim that may need to be made for life insurance can help reduce the financial difficulties that may arise due to the death of a spouse or loved one, particularly the main income earner. The insured benefit made out to the nominated beneficiary can assist in paying outstanding debts, such as the mortgage, and can provide a lump sum to be invested to cover the cost of future family needs such as children’s education.
Life insurance used to only provide a benefit upon death of the insured but now the insurers have expanded their product offerings to include protection from other risks that some consider are even more important than death cover. These types of life insurances include:
People insure their house and car against the possibility of damage, but don’t usually realise that risk of you having an accident or being diagnosed with a serious illness during your life is pretty significant. A serious illness or accident may require you to take months off work, significantly reducing the amount of money that used to come in when you were able to work. This may also be strenuous on a partner due to the possibility of them having to take time off work to look after you. It is important to research the variety of cover options available when selecting to take out the right policy.
Many people conclude that they may never personally benefit from this insurance, but it can also be known that when you have life cover in place you also have peace of mind that if you did pass away your family will be taken care of.
Most Australian's insure their homes and their cars but do not insure the most important asset which is the individual and their ability to produce an income.