While we insure our homes and our cars, insuring ourselves is a little less straightforward.
According to a 2010 report by the Institute of Financial Services Australia (IFSA), only 4 per cent of Australian families with children have the right level of insurance.
Taking the time to understand if you have the right level of insurance could be one of the most important things you do for your family in the event of the worst happening.
Here are a few things you can do right now
Check your super fund
Most super funds offer a level of basic insurance. However, you need to factor in your own financial circumstances to know if you should dial up or down the cover. If you have more than one fund, consolidating them means you may be able to consolidate your insurance efforts too. Taking the time to review you insurance means you’ll have the right level of cover to protect your family.
Don't forget the debts
Add up what your family would realistically need to maintain the standard of living you would want for them. That means taking into account any debts that might be left behind, from your mortgage to a car loan to credit cards.
Future-proof for your family
Don’t just think about now. If you have younger children, do you want to leave money to help them through university? Would you want your partner to be financially secure enough to not have to work up until retirement? And don’t forget to factor in inflation.
Use an insurance calculator
There are plenty on the web, including at the life insurance industry’s Lifewise.org , while First State Super’s own calculator can help you understand both cover and costs.
Get it out in the open
Insuring your life is something you are doing for your family, so they really should be involved in helping you make a good decision. Make sure your partner or close relatives who would be involved in your family’s welfare know what your insurance cover is, and which company or super fund holds it. It’s good idea to keep a list of important information like this with your will.