Life Insurance - A Luxury or a Necessity?

There is nothing certain in life except death and taxes. So, what’s the big deal about life insurance? Many people think it’s just for people that are sick or dying, but it’s not. It’s actually for those very much alive. We get it – no one wants to think life insurance if they have to think about maybe dying! It can also seem like a luxury if your budget is tight. A life insurance policy is important to consider, especially if you are the breadwinner of the family. Read on more as we detail why life insurance should be considered a necessity, as well has how to find the best life insurance policy in Australia for your needs.

What Is Life Insurance?

Of course before we can discuss whether life insurance is a luxury or a necessity, we need to know what life insurance is.

Life Insurance is also called ‘death cover’ (we know this is morose!). It is meant so replace any income you would have earned if you die, or there is another policy which covers if you can no longer work. You can purchase a life insurance policy which will pay an agreed lump-sum upon claim, providing financially protection for your family for financial obligations.

The amount of life insurance you purchase will depend on your individual circumstances. If you already own your home, you may need less than someone who still has a mortgage. Likewise if your family has considerable debts or loans, you may want your life insurance to cover those cost in full. Life insurance can give your family the chance to grieve without worrying about how they’re going to pay the bills. Find out more here and here.

Why Is Life Insurance Important?

Life insurance is an important part of financial planning for you and your family. It offers financial protection should something happen, and you or someone either dies or can no longer work (because of illness or an accident), and you or your family can no longer cover your financial obligations without any replacement income.

The best value life insurance for your needs will take into account a number of factors, which is why it’s important to compare life insurance options before you sign up or switch life insurance policy providers.

Is Life Insurance a Necessity or A Luxury?

It’s very difficult to see any benefits for a life insurance policy when you’re healthy and alive, especially with monthly premiums constantly being deducted from your bank account and your living budget is tight. It is very similar to health insurance though – you pay your health insurance premiums ‘just in case’. If you love the life you’re living and all is going well, that’s a great reason to secure a life insurance policy: to protect the lifestyle you and your family love.

Ultimately it will depend on your personal circumstances, budget and income requirements. Find out more here and then compare life insurance through Billy Explores!

How Much Life Insurance Do I Need?

The question of how much life insurance you actually need is similar to how long is a piece of string! There are many factors to consider including whether you are getting the best value life insurance for your needs, and how much financial protection is required.

If you’re young and single, and don’t have a lot of debt, then you probably don’t need a life insurance policy per se – so you can probably claim it as a luxury, however you should still consider other types of life insurance policies including TPD cover (which covers you in case of permanent disablement). This means if something happens where you can no longer work, then you will have a payout to support your financially.

Conversely, if you have a family and a mortgage, then you will probably need enough life insurance coverage to make sure your life insurance payout covers your debts everyday living expenses if you no longer have an income.

Check out this handy life insurance post here.

Is There Another Type of Life Insurance I Can Have?

Yes, there are various types of other life insurance available. You can have a life insurance policy which covers you should you no longer be able to work for a period of time (Trauma and Income Protection) or not at all (TPD insurance).

Again, whether you determine whether it’s a luxury or a necessity will be an entirely personal decision dependant on your specific situation.

I’ve Got Pre-existing Conditions – Do I Still Need Life Insurance?

If you have a pre-existing medical condition, it simply means you have a known injury, illness, or health condition that existed before you actually apply for a health insurance or life insurance policy.

According to the Centres for Medicare and Medicaid Services (CMS), as many as half of all US adults under the age of 65 have some form of a pre-existing medical condition. These chronic conditions range from asthma, to diabetes, to heart disease. Can you buy life insurance after such a diagnosis?

At Billy Explores we think that a life insurance policy would be a necessity in this situation. However, again, please ensure you compare life insurance options from our panel of providers and review your own personal circumstances. It is always a good idea to talk to a financial planner.

I Think It’s A Luxury – Should I Cancel My Life Insurance Policy?

There are some questions you should ask yourself before you cancel your life insurance policy. Firstly, did you really have the best life insurance policy for your needs? Secondly, did you know cancelling your policy could lead to some implications including it will more than likely be more expensive to purchase in the future. Additionally, you won’t have the security and peace of mind for your family’s protection should something happen to you. So before you cancel your policy, the best idea is to compare life insurance policies and find out what is the best value life insurance for your needs.

Compare Life Insurance And Get The Best Life Insurance Policy For Your Needs

As mentioned previously the question of whether life insurance is a luxury or a necessity is personal one, and every situation and person is different. The best way to make sure you have financial protection for you and your family is to get the best life insurance policy for your needs. Through Billy Explores, you can compare life insurance policies from our panel of providers, and get the best value life insurance in Australia for your needs. Compare now through Billy Explores and explore potential savings!