Life Insurance Cover
The pain and shock of the sudden death of a loved one is traumatic for all family members. Trying to cope with the loss of a loved one can take its toll on your health. This is only worsened if there is no protection plan in place to financially support the family at a time when it is needed most.
Life cover helps to protect your family by providing a lump sum payment in the event of death, which could be used to meet needs such as:
- Pay your mortgage and other loan repayments
- Provide an income stream for your family
- Children’s education costs
A recent study conducted by one of Australia’s leading financial institutions [1] found that 60% of parents believed that they would not be able to support their family if their spouse where to pass away. It doesn’t take much to ensure your family is looked after if you weren’t around.
CASE STUDY
Max (35) is employed as an accountant and earns $100,000 per annum. His wife Sarah (34) does not work and looks after their two kids Bill (4) and Zac (2). Their debt includes a $500,000 mortgage, $4,000 on credit cards and a $20,000 car loan.
Unfortunately, Max was involved in a fatal car accident and dies at age 35. Sarah, struggling to cope with the loss of her husband, has no income source and has $524,000 of debt to repay. Sarah may have to make a difficult decision and choose to sell her house in order to repay her debt.
If Max had life cover, Sarah would not have to sell the family home and the outcome would have been different.
If Max had life cover, Sarah would be able to repay the mortgage and also have some money available to pay for necessities whilst deciding on her employment options.
[1] Picking up the Pieces’ a research report conducted in 2010 by “Onepath” a subsidiary of ANZ
