Is Term Life Insurance More Important For Men Or Women?
Term life insurance is a personal protection product that is just as important for women as it is for men.
In Australia, there is a severe underinsurance problem that stretches across both genders; however women generally have less cover than men do.
Many are still under the belief that only the main breadwinner needs to be insured, but this is not true. The dollar value of a stay at home spouse can add up to thousands of dollars each year when you look at the amount of work that is done. One simple way to calculate how much this dollar would be is to get a quote for weekly house cleaning and baby sitting, and multiply this by 52. The resulting cost would be enough to astound you!
Term life insurance for single parents
Having adequate coverage for single parents is vital to the financial protection of your children. Just think, if you were to suddenly pass away, how could your children cope financially without you?
Not only is having a life policy important, but also the sum insured. You will want enough funds to pay for your kid's education and living costs until they are financially independent.
Term life insurance for couples
If your spouse were to pass away, could your family cope without them? If you didn't have term life coverage, your family may be forced to liquidate their assets to pay for living costs and to pay for your mortgage or credit card debts.
In this instance you will need additional funds on top of the money needed for your kid's education and living costs. Your life policy should also include amounts to cover mortgage repayments and any outstanding debts.
Many insurers offer discounts if your spouse purchases a policy as well. So be sure to enquire about this discount, as you can often save around 5-10% on your premiums.
Compare term life insurance quotes
Before you decide to compare life insurance quotes, first calculate how much cover you will need. This figure will vary depending on your personal situation; however as a rough estimate some financial advisors state that multiplying your income by 10 is a good starting point.
You will want to ensure that you are neither under-insured, or over-insured. Being under-insured leaves a risk gap that may leave your family short of funds after you pass away. Whereas on the other hand being over-insured means that your premiums may be much more expensive for a person in your situation.
Another thing you should take into consideration is what payment plan you prefer to go with. If you are young and plan to hold onto your policy for a long period of time, then level premiums may be better. If you only plan to hold your policy for a short period of time, then stepped premiums may be more cost effective.
If you are unsure of anything, be sure to speak to a financial adviser.
by: Grant Main