Are you paying too much for your life insurance?

Life insurance is not the cheapest thing in the world. However, cost is the main reason why some people avoid getting it despite its potential benefits.

In addition, some types of life insurance can appear to be cheaper than their true value. That’s why it can be discouraging to think that you’re overpaying for a job that was once considered expensive.

In NobleOak’s 2022 Whitepaper, researchers confirmed that ‘not seeing the benefits of their policy’ was one of the main reasons they did not increase their cover. Another reason was that people did not know if they had the right type or amount of cover. Unfortunately, this is what happens all too often. And it depends on how well you can compare what is available. Because without analyzing them properly, then you pay more for the insurance you need.

Probably, paying for life insurance is the last thing you want to do. If you haven’t checked your insurance in a while, it might surprise you to know what’s going on. You can pre-pay for your life insurance.

There are a number of things that can make you pay more. Maybe you started with the wrong insurance policy. Or, you may have bought term insurance when the life policy you have within your super provides enough cover for the time being.

Either way, a comprehensive life insurance quote can show you what’s going on. It can also help keep you informed of other updates.

In this article, we highlight three signs that you may be paying for life insurance and offer suggestions on what to do about it.

Three Big Signs You’re Paying for Insurance

Do you really need the insurance you are paying for? More importantly, is it the right life insurance for you? The following may help you consider whether or not you are paying too much for insurance.

Let’s take a closer look.

1. You Have Insurance You Don’t Need

Life insurance is a good idea when you have other people who depend on you financially. Or, you may have a mortgage or other debts that will enrich your loved ones financially in the event of your untimely death. Finally, life insurance can help pay for your children’s education in the event of your sudden death.

Meanwhile, people who are single, just starting their careers, aren’t planning to buy real estate and don’t have enough credit or a lot of future income may not need life insurance.
On the other hand, if you have already paid off your mortgage and are enjoying retirement, it may be wise to review your policy. As your children grow up and perhaps take out their own insurance, they may no longer rely on your money. With no remaining debt and a retirement nest egg for income, your policy may not be as important as it once was because your circumstances have changed over time.

However, there is another issue to consider. Although it may seem like a worry, the money you spend on your funeral can affect the family’s finances.

2. You bought the wrong insurance policy

If you joined a super fund, you may have life insurance. However, it is no longer compulsory to have life insurance within your super. Before this change, most people didn’t know they had life insurance as part of their retirement savings.

This may mean that you may be paying for term insurance purchased directly or through an advisor in addition to the life insurance you received.

Be aware that although life insurance through annuities is often cheaper, it is often not written in advance and therefore often comes with pre-existing balances.

However, people need to consider not only the nearness of withdrawal, but also whether the amount of life insurance they have in their retirement years is sufficient. By looking at your expenses and credit, you can determine if you need an additional insurance policy.

3. You’re Too Calm For What You Need

A straightforward method that many use to figure out how much life insurance they need is to multiply your annual salary by six to ten times. Additionally, there are many free life insurance calculators online that can be used as a tool to help people estimate how much cover they may need.

It is often a good idea to be clear about your goals such as paying off the mortgage, paying for groceries and taking care of your family’s financial future.

Below is a list of the main types of life insurance, as well as some factors to consider when determining how much life insurance is right for you.

  • Term life insurance: Also known as ‘life cover’ or ‘life or death insurance’, this type of insurance protects your family from financial hardship in the event of your death. Consider your debts, the cost of child care and raising children, and your funeral needs when choosing an investment fund.
  • Financial protection insurance: If you have to stop working due to serious illness or serious injury, financial protection helps you financially as you can insure from 60% onwards (depending on the insurance policy and your policy) of the amount you choose. benefit period when you are unable to work. When calculating the amount of cover you need, consider how much money you need to live on.
  • Trauma Insurance or Critical Disease Insurance: With this type of life insurance, you are paid money to help reduce the financial burden if you suffer from a serious or critical illness that is specified under the insurance cover.
  • Total disability insurance (TPD): If you are injured or ill and can no longer work, TPD cover will act as a source of income. With TPD cover, you get paid more when you want to do better. There are a number of factors to consider when calculating the amount of TPD cover you will need, including your debts and housing, your regular expenses, income you will lose due to being unable to work, changes to your lifestyle due to your permanent disability, and changes to your home. adapt to your new needs.

Before finalizing your insurance policy, make sure you ask questions. Find out exactly what your insurance covers, and any additional or special requirements.

Depending on the terms of your policy, you may have some changes in the price during the term of your cover. For example, NobleOak offers a very cool benefit. This means that if you choose, your future payments will be based on the amount you paid on the date you notified us (although the premium will be reduced to the current cover at that rate).

The best time to think about this is when the plan needs to be updated.

How Comparing Life Insurance Helps

With a comprehensive life insurance quote, you can better understand how you spend your money. There may be costs and expenses that you can reduce. If you identify such expenses and adjust your insurance accordingly, it can prove to be a great financial benefit. Everyone’s circumstances are different so there is no ‘hard and fast’ rule here.

However, be aware that people often underestimate how much coverage they need. Research completed by Rice Warner shows that the insurance crisis is getting worse with parents in their 30s needing $561,000 for basic life cover compared to $207,000 for parents in their 50s.

It’s important to review your resume from time to time, especially if your lifestyle changes. If you want to change the amount of your insurance to lower your premiums, always check with your insurer.

Taking out life insurance can be one of the most important financial decisions you will make. For more information or to get a quote, call a member of the NobleOak Life Australia insurance team on 1300 014 494, or visit on the Internet for non-binding terms.
This is for informational purposes only and is not based on your personal circumstances, goals, finances, or needs. Always refer to PDS for more information on insurance cover.