The right life insurance for you and your family depends on your financial needs and budget. Here we determine how much insurance you need and the policy options available.

Choosing the right life insurance is a personal decision – and often comes down to what’s right for your family, your financial needs and your budget.

In this article we look at some of the ways you can determine how much insurance you need, and the policy options available to you.

Assessing your insurance needs

To choose the level of insurance that’s right for your circumstances, start by determining what you need to cover. Simply put, what are your current and future financial goals and obligations?

Using a budget planner can be a helpful way to get a monthly and annual picture of your current income, assets, liabilities, and debts. Make sure to consider some longer-term future scenarios, too.

Here are a few questions to help guide your thinking:

• Do I have enough savings to support my family if I can’t work for a while due to illness or injury?
• Am I planning to purchase property - or currently paying one off?
• Are there major expenses ahead such as having a wedding or starting a family?
• Am I planning to help my kids with education or housing as they grow older?
• What do I want my retirement to look like – what are my dreams and ambitions?
• If the worst happens, will my savings cover my funeral and estate costs?

Determining the ideal cover amount

One way to work out how much cover you’ll need is to consider insurance as income replacement. If something happened to you, how much would they need to maintain their current lifestyle without your income?

Understanding policy features and options

Life insurance isn’t one-size-fits-all. Policies vary, and many offer flexible options to suit your needs, such as:

• Standalone or bundled cover – bundling may reduce your premium.
• Indexation - also known as inflation proofing, will increase your cover and premiums each year to keep up with the rising cost of living.

Balancing affordability and cover

Reviewing your insurance doesn’t have to be overwhelming. There are ways to adjust your cover, so it continues to support you - without stretching your budget.

You might consider:

• Reviewing your cover amount - the more protection you have, the higher your premiums
• Evaluating options or benefits – they can provide a safety net but come at an additional cost
• Updating us on lifestyle changes – health improvements may reduce your premiums, such as quitting smoking, giving up risky pastimes, or an improved Body Mass Index (our holistic health, wellness, and recovery program, Vivo, offers a lifetime discount of 7.5% on insurance premiums when your BMI is between 18.5 and 28.5)
• Opting out of indexation if it’s not needed this year
• Adjusting your Waiting Period or Benefit Period on Income Protection for example, if you have accrued leave or other sources of income you could rely on if you had to take time off work.

If you’d like help to tailor your cover to better suit your life today, we recommend speaking to a financial adviser or call us on 13 65 25, 8.30am to 6pm (AEST/AEDT), Monday to Friday.