The market is flooded with a variety of life insurance policies, each with differing terms and conditions of cover. They are available from a range of providers including insurance companies and insurance brokers, banks and building societies, internet providers and even large supermarkets. Your specific needs and circumstances will influence which type of life insurance is best suited to you.
Once you have an insurance policy, you should regularly review it to ensure that it continues to reflect your current personal and financial circumstances. For example, if you have paid off your mortgage, there would be no point in factoring mortgage repayments into the amount of money that your dependents require in the event of your death, known as the 'sum assured'. Equally, if you are made redundant, you may wish to decrease the sum assured; by doing so you may be able reduce the cost of your policy whilst you are looking for new employment.
There are four main types of life insurance, Term Life Insurance, Income Protection Insurance, Trauma or Critical Illness Insurance and TPD (Total and Permanent Disability) Insurance. You can also choose the type of payout your survivors will receive.
Life,TPD and income protection insurances are all offered within superannuation. If your insurance is held within superannuation, the cost of the premiums is withdrawn from your superannuation balance. So it is important to work out the best way to structure your insurance, whether inside or outside superannuation, or a combination of the two.
For further details see:
> Trauma or Critical Illness Insurance
> TPD (Total and Permanent Disability) Insurance
