Life Insurance – Reviews and Considerations

By Simon Cooper
April 28, 2022

The constant fluctuations in the market cost of necessary goods and services pressure the general public to be more wary of budgeting. With all the bills that need to be paid, getting life insurance seems pretty excessive when life is actually good. One would rather focus on the things that are needed and should be prioritized at the moment and frankly, that is a very smart thing to do, however, what a lot of people also don’t realize is that life insurance provides one thing we strive to provide our family with even after we are gone: protection.

Life insurance in Australia, like in any other country in the world, remains to be undervalued. There is a growing underinsurance gap and most people still fail to realize what they are covered for, are not covered for or what types of cover are even available.

As the world recovers and adapts through the changes brought about by the Covid-19 pandemic, a lot more people are starting to realize how beneficial it is to have the certainty of being protected now more than ever.

How Life Insurance Can Protect You

The purpose of life insurance is to provide your loved ones with financial protection even after you are gone. A tax-free payout is the main benefit, but the advantages of life insurance extend beyond extra cash.

We went ahead and outlined some of these advantages below, but we highly suggest that you should also do your own research for you to better decide if life insurance is suitable for you before taking out a policy.

  • Lifetime coverage – Permanent life insurance provides death benefit coverage for life so you don’t lose your coverage after a set number of years. It guarantees a payment for your beneficiaries upon your death so they will not be burdened by the cost of your funeral expenses or be left with debts should you have any. This coverage is especially valuable to those who anticipate people being financially dependent on them beyond the length of a typical term policy, this benefit may be attractive to you.
  • Tax-deferred growth – Permanent life insurance policies that have an investment component allow you to grow wealth on a tax-deferred basis. This means that the cash value of your whole life insurance policy will not be taxed while it’s growing. In this way, your money grows faster because it is not being reduced by taxes every year, you don’t pay taxes on any interest, dividends, or capital gains on the cash-value component of your life insurance policy until you withdraw the proceeds.
  • Borrow against the cash value – The cash value in a permanent life insurance policy is equivalent to the amount of money you would receive if you surrendered the policy. It grows overtime at an interest rate that is set by the policy’s terms. If you have a permanent life insurance policy that accumulates cash value, you can borrow money from the insurer using the cash value as collateral which then you can use to buy a home or pay for college.
  • Accelerated benefits – Although it is not true to all, this clause is commonly found in certain permanent life insurance policies. This enables you to receive anywhere from 25% to 100% of your permanent life insurance policy’s death benefit even before death in the event that you develop a specified condition. However, it is normally reserved for those that are suffering from a terminal illness that require permanent home confinement or are medically incapacitated. The upside of accelerated benefits, as they’re called, is you can use them to pay your medical bills and possibly enjoy a better quality of life in your final months.

Protected By The Right People

Life insurance is a complex product so you should, as much as possible, not rush to take out a policy. You have to be strategic and think long and hard about your personal circumstances to determine whether you are in a good standing to be able to get a life insurance policy in place. Once you are decided, there are a lot of options to choose from, each one with its own unique set of policies suitable for different occupations and life stages, offering a wide range of benefit options.

If you are not well-versed in the language of insurance policies, this process can get overwhelming, fast.

At Forward360, it is our goal to help you in every step of the way. The journey to financial planning towards wealth creation can be long and tough but you can leave the worrying to us. Our highly experienced team of financial advisors, are well equipped to help you decide on which insurance to get and where to get it from. We will come up with an effective insurance management strategy to make sure that if something happens to you, your family will be more financially secure. Protect your family’s financial future and we will protect your peace of mind towards a better and wealthier life, sooner. Contact our support team today.

Simon Cooper

Co-Founder, Managing Director, Financial Adviser

Simon is a financial advisor who takes his work seriously. He ensures that all of his clients receive the best possible advice, so that they can reach and exceed their financial goals, both personally and professionally. Simon has been in the business for many years, and has a wealth of experience to share with his clients. He is known for being friendly and approachable, and always puts the needs of his clients first. Simon Cooper is an Authorised Representative of Reedy Capital Pty Ltd (AFSL No. 495539), Authorised Representative Number 1248807 and a financial adviser at Forward360.

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