Life Insurance Questions

[Abigail]

I am finally considering getting some life insurance in order. I am going to try to apply through my super fund first but Im expecting that I may get knocked back from them due to medical issues in the past. If this happens are the "no medical check" life insurance funds worth applying to? How do they work? Do they work by having a higher premium to account for the no check?

Apart from that, my other question is how do I work out how much cover I should actually have? I am the sole income earner. Primary care giver and well, its basically just me and the little person. I want to make sure that if I were to die today that their education for at least primary school is covered by me plus living expenses. How do I work out living expenses? We have no debts (bar hecs - I would need to count that into my figures wouldnt I to ensure it gets paid out in my estate?). I have pretty much no assets either. My super is a reasonable amount though not enough to cover HECS, funeral and then schooling.

And last but not least, what is a reasonable amount to be looking at paying for life insurance? My super fund offers $10,000 cover for $1.50 (?) per week. Paid from the fund. Does that seem on par?

Also is Total Permanent Disablity insurance a good idea? a must? a take it or leave it?

oh, this is just so hard! (Or is it just me that finds it that way?)

[Artechim]

HECS debt dies with you. Your estate is liable for any outstanding repayments due at the time of your death (ie the payments you owe for that tax year), but the remaining balance is written off.

I pay $30 a month for $500k cover. I chose that amount as what my DH would need to pay out the mortgage and to cover his lost income for a time after my death to care for the children. DH is covered for the same.

DH had a pre-existing cholesterol problem and had to go to the Dr to get his levels rechecked. I had no previous issues and was accepted without a medical.
It is worth ringing a company to ask if your previous health issues will be a barrier. It isn't easy to figure out what you need and to deal with the paperwork.

[Three Graces]

oh I feel your pain. I've decided to do the same thing and contacted my super fund who referred me to their website, which redirected to their insurance provider. What I thought would be a simple request turned into something pretty full on. I don't know anybody who can fill out those health questionnaires without coming back positive on something. I currently have two units of cover for death and disability with my super fund (I can't remember how much this covered) and want to increase it. I also found that I'm currently paying for income protection when I'm on mat leave and not currently earning anything. Apparently, somebody from the insurance company is going to contact me for further information.

[LuluHB]

I'm not sure that the no medical check companies will solve your problem of the earlier condition because I imagine you will still be asked to disclose any existing/previous condition. Don't hold me to it because I've never spoken to them, but even if you aren't asked anything in the initial signing up phase check the fine print very, very carefully. The last thing you want is to think you've done everything you need to, only to end up with the insurer having a loop hole they can drive a truck through.

My DH and I both have life insurance as well as total and permanent disability insurance. He is the sole income earner at the moment and is self employed so he also has income protection insurance build in to his disability insurance. We have two different companies for our insurance, but they are independent of our super. We also have significantly more coverage than you are talking about and therefore a significantly bigger premium.

FWIW, I think insurance is an absolute must - both kinds. If God forbid someone ends up disabled or incredibly sick as opposed to (just) dead, we will need even more money to attend to that person's needs as well as provide money to live on. We have been looking at where we can cut costs lately, and insurance just isn't one of them.

[Jerri Goe]

Also is Total Permanent Disablity insurance a good idea? a must? a take it or leave it?

oh, this is just so hard! (Or is it just me that finds it that way?)

I would recommend it if you could afford it just for the peace of mind. It is a nice feeling to know that your family isn't bothered about finances after you leave. I realize I sound very cliched but think about it for a while. How can anyone be certain of his/her future. There is no warning before it happens and I think you want to be sure when it happens...

These are big decisions and they are meant to be hard for the same reason Good luck with your research...

[Cherished]

I saw this post the other day but didn't have time to post. I have an incredible peace of mind knowing that we have life insurance and it's a bonus if you get a good deal through your super fund because the premium comes out of your super and you don't miss it out of your accessible income. My dh also have insurance through his work. It's worth noting that an insurance company wont pay out on 1 life twice even if there are 2 different policies. For this reason I made sure that the company who covers my dh at work is not the company that we have our other insurance through. I also think TPD is important and I even looked into trauma cover. We couldn't get the premiums taken out of super fund for Trauma cover so we don't have it. It covers so many things which is awesome but it's way more expensive! I forgot to add that dh also has the top income protection insurance (again premiums are taken out of his super) This is really important because if he can't work for some reason we would still need to pay the bills!

[Abigail]

Ive done some looking of my own and I can get more cover for less outside of my insurance company. Its just a question as to if they will accept to cover me or not I guess. I havent gone through with applying yet as I want to really research this. Is there some sort of company/financial planning service that can help you with this sort of thing without costing a small limb?

As for TPD it seems their is a minimum number of working hours for it? Does that seem right?

Cherished I looked at income protection but I dont work enough hours yet to be eligible (not to mention afford it lol).

So at the moment Im concentrating on the life side of things.

[k4t]

Amount of cover is a really personal thing so I probably can't help you there. DH and I both have enough life insurance to pay off the mortgage, take a year off work and enough left over to invest and provide enough income for childcare so we could return to working.

When we looked into it we found insurance through super much more expensive and less flexible than elsewhere but some people prefer it as its paid with pre tax dollars. Also look into whether you want level or stepped premiums. Level are more expensive now but will work out cheaper if you continue the policy around 10years plus.

Do you have income protection insurance? If your the sole earner for your family that's the first thing I'd be getting. And it's tax deductible.

[k4t]

Oops, looks like I missed your last post. Sorry

[LuluHB]

We went through an investment/financial planner in Perth and he recommended a couple of different plans and providers for each of DH and I. I can't remember exactly how much it cost but it was two or three hundred I think for a meeting with him to discuss our situation, him going off and looking into policies etc.

Not sure about there being a minimum number hours for TPD being correct because I have that cover, and I'm a SAHM and was at the time the cover was taken out.

[Cherished]

It's interesting how quotes vary! Three times now I have looked into changing our insurance and searched for days getting quotes and comparing apples with apples. The cheapest is still by far my super fund and I mean quotes were at least double elsewhere (I am not exaggerating). My dh even rolled over a portion of his super into the different fund which I was already with because the premiums in his fund were much higher. Then we set up a SMSF and we still left a portion in the old super fund just so that we could have our life, TPD and income protection insurance through that super fund. I also read every clause, yep, pages and pages and pages worth and compared everything! Once you've done your research and decided you'll be glad you have the cover.

[Abigail]

It would seem I'm uninsurable except for accidental death (which costs just as much as full life) :'( I just want to make sure that the little people will be taken care of in the future and I cant. Kinda sucks. Thanks for all the information though, it helped a lot

[Mother Goose]

Have you looked at million dollar mum?