Life Insurance at Different Life Stages

Generally, it’s a good idea to ensure that your current life insurance policy provides you with sufficient coverage for your current phase of life and the requirements surrounding that phase.. When you aren’t reviewing your life insurance systematically throughout your life, the ones you love most may be effectively protected should something happen to you. It’s essential to do a yearly review of the type and amount of coverage you have to ensure your cover matches your requirements.

In Australia, there are different personal insurance types suited to different requirements, including:

Whenever life changes, review your life insurance needs and make sure the policy type still meets your requirements. Below are the different life stages which generally require you to re-evaluate your insurance coverage.

Buying a house

If you have a mortgage, you might require additional life insurance to cover your home loan, so the If you have a mortgage, you might require additional life insurance to cover your home loan. Generally, this will help to prevent your financial burdens from falling to your loved ones. You might also want to look at Trauma insurance because it may help you pay for medical treatments and assist you in replacing your income while you focus on recovery.

Starting a family

When becoming a parent, you’ll want to make sure you have enough cover in place to support your partner and account for the future costs of raising your children, including school and college. Life insurance for families is especially important if you are the primary or sole breadwinner. Policy riders, like TPD and critical illness cover, might also be beneficial.

Select insurance companies may also offer you child cover as an optional benefit to your life, TPD or trauma insurance policy. Child cover generally pays a benefit when your child dies or is diagnosed with a terminal illness or a critical illness, for example, heart conditions.

With the added responsibility of a family, you might also want to also protect your income with a TPD and/or income protection policy.

Getting Older

Seniors life insurance for over 50s might be necessary if you still have outstanding debts, especially a mortgage or a car. Because people have children later in life, you could even require life insurance to support yours, or perhaps your elderly parents financially.

When you’re over the age of 65 and retired, you typically don’t need income protection or TPD coverage, because you won’t be earning an income. However, trauma insurance at this stage of your life is generally essential, because the older you get, the higher your risk of developing a critical illness.

You might want to maintain a small amount of life insurance if you don’t have funeral cover or would like to leave a legacy, where the money is paid to your adult children or a chosen charity.

Switching jobs

When changing your career, it’s important to review your new employer’s superannuation and the insurance benefits provided. You might need to increase the coverage or buy an additional policy that gives you access to more benefits, for example, a retail policy held outside of superannuation.

Starting a business

If you’ve taken the plunge into entrepreneurship, keyman insurance could be beneficial. A key-person insurance policy protects your business by paying a lump sum benefit if an essential person to the business passes away or gets diagnosed with a terminal illness.

Getting divorced

If you’ve separated or divorced, you should also review your life insurance, as you might want to decrease the cover amount. However, if you have children, and you must pay child support, you need more insurance.

Be sure to update the beneficiaries listed on your policy documents if you don’t want your ex-partner to receive the lump sum benefit when you die.