Life Insurance Really Matters

Would your dependants feel comfortable
knowing they can draw upon an IOY?

No one expects sudden death, illness or an accident. But when such unfortunate events occur, they can be devastating for you and your family (and if you are a SME business owner, your business colleagues and employees).

If something does happen, it may be difficult to cope financially. It’s much nicer knowing your dependants have financial security via a payment, an IOY from a personal insurance company.

People unquestionably fully insure assets, such as house and car. However, when it comes to your assets, there's none bigger than your life’s future earning potential. Why wouldn’t you insure your biggest asset?

For the analytically minded, the chart shows probability of death by age 65, given a current age.

Observe that 1 in 8 40-year old males and 1 in 12 40-year old females won’t survive to age 65.

If you have life insurance in your super fund, this is rarely enough on its own. In fact, the Rice Walker actuaries study Fast Facts: A nation exposed estimated the life insurance held inside super represents only 20% of the cover actually required.

How much life insurance do you think you need? For a first pass estimate, try the Tower Life Insurance Calculator.

Determining the right amount of life insurance, however, is not a simple process. Consideration must be given to current and future needs of dependants; insured future earning potential; amount of investment risk willing to be tolerated; taxation of benefit payment; complexity of current investment and/or business structures, and more.

At Archimedes Financial Planning, we work closely with our clients to find their trade-off between putting savings into investment for the future assuming no-one dies versus investing in insurance now to protect dependants should you die.