One of the biggest misconceptions around life insurance is that it’s solely designed to provide a payout if you die. But life insurance is relevant at every stage of your life.
From your fancy-free 20s while you are grinding and growing that empire, all the through your working life and into retirement, you will have different goals and priorities worth protecting.
Here we look at the types of cover you should consider at each age and stage.
20-30 years
Partying, travelling, studying, working – for many, the first decade of adulthood means plenty of fun and not a whole lot of responsibility. As a result, you’re more likely to test your limits on the sports field, on the slopes, or in the sea.
At this age it may not seem like you’ve got a lot to lose, but what about the loans you’ve taken out? That credit card bill you’ve racked up? The career you’ve been building? The mortgage you’ve just taken out with your fiancé?
Life Insurance protects the future you’re building, your partner and your family, who could face liabilities if something happened to you.
To protect what matters to you in your 20s, consider taking out Income Protection, Total Permanent Disability and Recovery Insurance with cover for Sports, Adventure Sports, Critical Injury and Accident. With age on your side, your premiums will start low if you opt for stepped premiums and you can protect long term affordability by locking these premiums into Level options.
Don’t let your debt be a burden to a loved one if it can be avoided.
30-40 years
In your 30s you’re likely to be knuckling down: maybe you’re paying down a mortgage, building your investments or welcoming children to the family.
It’s not only a busy and exciting phase, it’s one that can come with increased expenses and potentially debt.
While it can be tempting to focus on paying down these debts or accumulating more assets, it’s equally important to make sure you’re protected.
We can’t always predict what’s going to happen in life, and while we don’t like to think about the cost of being injured or getting sick, there are ways to support yourself and your family should you need an extended period off work or you are diagnosed with an unforeseen sickness
In your 30s you should consider Life Insurance, Income Protection Insurance, Recovery Insurance and Total Permanent Disability Insurance. Within each of those insurances you should look at building in additional protection against Illness, Accident, Injury and Cancer.
If you are a Business Owner you should also look at protecting yourself within the business to ensure operating costs are covered if something were to happen.
40-50 years
In your 40s you’re probably still plugging away at your mortgage(s), getting to the more expensive end of your children’s education, climbing the earnings ladder and adjusting your lifestyle accordingly.
At this stage it’s important to protect everything you and your family have achieved, and the things you’re still working towards.
Life Insurance, Income Protection Insurance, Recovery Insurance and Total Permanent Disability Insurance with appropriate additional cover for Accident, Illness or Cancer are all worth considering at this stage of your life.
It’s also a good idea to review your level of cover regularly to make sure it protects your current assets and liabilities. You want to ensure you are not under-insured and at the same time you are not over-insured so that you are not paying unnecessary premiums.
If you haven’t done so already, think about whether your children need life insurance, are they in one of the above scenarios.
It’s a horrible thought, but the unexpected death, terminal or critical illness of a child can be devastating financially, as well as emotionally to everyone in the family.
Child Life Cover can cover out-of-pocket expenses that are not recoverable via private health insurance or welfare schemes, and ease financial strain if a parent has to reduce their work to care for a sick child.
50-60 years
At this stage you are likely consolidating your wealth, getting to the point where your mortgage is nearly paid off and preparing for retirement.
You may also be enjoying having an empty nest and doing a bit more adventuring.
While you may feel you have fewer responsibilities now, the facts are: these are often your prime earning – and saving – years, but they’re also the years when chronic diseases often emerge and the likelihood of a claim arising becomes higher.
If something were to happen to you or your partner now, your retirement plans and the lifestyle you’ve become accustomed to may be disrupted. Not only that, your children could be left with your debts.
Life Insurance is particularly important now – providing your beneficiaries with a lump sum if you die – and Income Protection, Recovery and TPD Insurance can play a vital role in ensuring you get to embrace that retirement you’ve been working towards all these years.
No matter what stage of life you’re at, life insurance is worth considering. If you’re unsure about which option is best for you, we can help.
As always, our office is located in Oran Park and we also service the wider Macarthur region including Narellan, Harrington Grove, Harrington Park, Gregory Hills, Campbelltown, Liverpool, Fairfield region and all of Sydney. Please email admin@rpwealthmmanagement.com.au or call us on (02) 9188 1547 to discuss your options further.
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