Life Insurance
What is Life Insurance?
Life insurance pays a lump sum upon death. Most insurers also will advance the death benefit to an insured on the diagnosis of a Terminal Illness.
It is one of the easiest products to understand and it’s usually the first one that people think of when discussing insurance.
The cost of the life cover is based on the amount of cover you want as well as your age, occupation, gender, smoking status and your health – i.e. height/weight ratio.
How is it paid?
Life Insurance is paid as a lump sum benefit upon your death or diagnosis of a terminal illness. The sum insured is payable to the policy owner who could be a spouse, business partner, children or some other party.
What is the purpose of the cover?
The lump sum payment provides a capital amount that could:
- allow your family to repay debts including mortgage, personal loans, guarantees, credit cards and store cards
- provide an adequate income for your dependants to pay for living expenses, school fees, child care and regular bills.
- protect your business if a key person or principal dies – possibly allowing you to buy out your deceased partner’s equity.
- provide a cash deposit to the estate, which may prevent other assets being sold.
- create an estate that can provide for children/grandchildren etc.
- provide a benefit to a nominated charity or service organization of the deceased’s choosing. Charities such as Cancer Council and Heart Foundation.
- with the appropriate level of cover in place an individual can take peace of mind from the fact that with capital available on his/her death that dependants are provided for and have control and choice.
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