Life Insurance

Life insurance pays your estate or nominated beneficiary a lump sum of cash in the event of your passing away.

The cost of life insurance is based on statistical tables that rate the likelihood of a person dying at a certain age. For example except for a young male in his early 20’s the cost increases as you get older with the cost increasing slowly until the early 40’s when it starts to increase rapidly.

Life insurance products are not easy to compare due to each providers rules and the features of their respective products.

Superannuation funds very commonly offer life cover for their members. The amount of cover may be something you can choose or it may be set by the fund.

There are various methods of calculating how much cover you need. These include working out how much you would have earnt over a typical working life if you had not died and then reducing this to a present day value. The alternative is to work out how much your dependents would need if you passed away.

For example, $100,000 invested at 5% would produce $5,000 a year. The proper amount of cover is something that should be discussed with a professional.