As a startup founder we don’t really spend a lot of time thinking about a dire version of our future. However sometimes the unexpected happens. That is why Startup Daily has partnered with Small Business First and NobleOak to bring you the following offer.
It pays to know how Life insurance works. The reality is that if anyone relies on you financially, you may need some form of Life insurance.
Despite Life insurance being deserving of consideration by every household and business, however, there remains a great deal of confusion around how the cover works and what it delivers.
Perhaps this is due to Life insurance’s complexity, the assumption that everyone is automatically covered through their superannuation, or merely our preference for avoiding the topic of our own demise.
Add to the mix the fact that there are different types of Life insurance to cater for individual circumstances, and it can make figuring out the right cover to select seem like a walk in the park without a map.
What does Life insurance deliver?
Life insurance can provide a source of income for your dependants should you die, have an accident, or become sick. There are five main types to cover a range of scenarios. The right cover depends on your income, occupation, age, sum insured, health, pastimes, and family and business situation.
Business Expenses insurance: This is similar to Income Protection insurance but it’s designed specifically for business owners. It pays a regular benefit for a specific period to cover business costs if you (as a business owner) suffer a serious illness or injury and are unable to work.
Life insurance: Can provide replacement income for your dependants should you die. It pays a pre-agreed amount in a lump sum at the time of death.
Total and Permanent Disablement (TPD) insurance: Financial cover for permanent loss of work due to serious illness or injury paid in a lump sum.
Trauma insurance: Pays for critical illness and is delivered in a lump sum to cover medical expenses and ongoing recovery costs.
Income Protection insurance: Pays up to 75 per cent of your taxable income for a set period due to illness or injury.
So do you really need Life insurance?
Life insurance can be a very good idea if you are a spouse or have dependent children. But you may also require a cover if you have dependent parents, are the sibling of a dependent adult, or are an employer or business partner.
Is Life insurance expensive?
Life insurance can be surprisingly inexpensive if you choose direct cover through a Life insurance company that doesn’t spend money on expensive marketing campaigns and large commissions to advisers.
Are you covered for Life insurance through super?
There’s a common misconception that everyone is adequately covered for Life insurance through superannuation. Ratings agency Canstar estimates 83 per cent of people sign up for the default death benefit covered by their super fund.
This type of cover can be cheap but there’s a downside. The Australian Investments and Securities Commission (ASIC) warns that the types of Life insurance and level of cover provided through super funds are usually limited.
ASIC also warns that if you move to a different super fund, your cover may end without notice, and Life insurance paid out through a super fund is often slow to be distributed.
Why fully underwritten insurance is in your best interest
It’s important to source Life insurance that is fully underwritten. This means the company comprehensively classifies how much of a risk you are based on your age, occupation, sum insured, health and pastimes.
These questions require you to answer truthfully but are succinct and are designed to ensure you know exactly what is covered in your cover from the outset so that you can feel confident at claim time. It’s also wise to choose an established Life insurer backed by global reinsurers for extra security.
To help find the best cover for you:
Important information: This is general advice only. Please read our before applying and click here for information on cost savings. NobleOak Life Ltd ABN 85 087 648 708 AFSL No. 247302 is the product issuer.