How much life insurance do I need?
How much life insurance do I need?
Life insurance is there to provide you and your family with financial protection if something goes wrong before your retirement, for example, if you pass away, become permanently disabled and cannot work or are temporarily unable to work for a period of time because of an injury or illness. While the idea of it is straightforward, the question of how much cover you need is far less simple.
Many Australians may already have some level of insurance through their super fund. In some cases, that cover may have been in place for years without being reviewed and in that time, your life may have changed in many ways. You may have taken on a mortgage, started a family, increased your income or become financially responsible for others. The amount of insurance that may have been appropriate a decade ago, may look very different today.
The goal of life insurance isn’t to leave behind a certain dollar figure. It’s there to help protect the people who rely on you financially if you’re no longer around. That means thinking about the debts that would still need to be repaid, the income your household would lose and the costs your family may still need to cover in the years ahead. Once you understand those responsibilities, it becomes much easier to judge whether the cover you already have is enough or whether it may be worth reviewing.