YBR

Considering how much life insurance you need?

In this article:

Figuring out how much life insurance cover you need can be tricky. Here we run through the basics to help make this step easier for you and your family.

You insure your car, your home and many of your valuable possessions, so why not your life? Your income, your life and your family are the most precious things you have, so purchasing insurance to take care of them no matter what happens isn't morbid - it's just common sense. 

How much cover do you need though? We've put together a quick guide to the basics of working it out yourself. 

Consider existing schemes

In the event of your permanent injury or death you should consider how much your family will receive from superannuation schemes, existing policies, savings, and any paid leave you may have. This income will be a godsend for you in the event that you're unable to work, or for your family if you pass away. 

Working out how much cover you need can be difficult.

It's essential to include all of these factors in your calculations when working out how much cover you need, as it could mean you need less, and can pay lower premiums. 

Tally up your debt

Another oft-forgotten factor when working out how much life insurance cover you need is your level of debt. If you pass or become injured and are unable to work, the burden of that debt will fall to those closest to you - your family. 

AMP's data shows household debt quadrupled during the 27 years to 2015 to sit at around $245,000, so there's a good chance that this could be quite a significant factor in your calculations. Work out how much your weekly debt repayments are in total and make sure that you consider that amount when calculating how much cover you need.

Take the first step

How much does your family need?

Even if you're not the main breadwinner, losing your salary could make things tight for your family if you pass, or are unable to work. When figuring out the amount of cover you need consider how much your family's lifestyle will cost to maintain. 

Include costs like child care, education from kindergarten through to college and of course general costs of living like rent, food or mortgage repayments.

Don't worry if you're struggling to come up with a figure though. Here at Yellow Brick Road Wealth Management, we're experts when it comes to tailoring a life insurance policy to you and your family's specific needs. 

Get in touch with your local Yellow Brick Road representative today to start ensuring your covered no matter what happens. 

Feature articles

Is Gazumping Illegal? It’s a Common Question Surely it can’t be legal for another buyer to snatch away the property you’re about to buy?

4 Ways to Make Money Investing in Property Interstate Capital growth and positive rental return is your aim, but you’re worried that buying property interstate will yield a lemon. Try our smart tips for success.

Buy Now Pay Later: When Will I Regret It? With interest-free “buy now, pay later” services like Afterpay, there doesn’t seem to be much that could go wrong. Or is there?

What the Federal Budget means for you Morrison’s third budget is headlined by $140 billion in tax cuts over the next decade, immediate tax relief of up to $1,060 a year for middle-income households and a fundamental reform of the tax system.

What You Need to Know About Fixed Term Break Costs Take notice of the break fees on your fixed rate loan – they may cost you more than you think.

View all articles



Enquire now