Although life insurance has been a common by-word, it hasn’t ceased to baffle the minds of most because of the complexities of some policies and the jargon used in the industry, because of this a lot of people still shy away from getting life insurance.

The thought that would come to mind is – the terms and policies themselves are already complex, how much more complex will it be to maintain? So in order to develop a good strategy, it is important to talk to your financial adviser. But before that you should learn a little more about life insurance, as it would be easier to discuss with them when you are familiar with the basics of life insurance.

Term Life Insurance

If term life insurance has a flavour, it would be the vanilla flavour of ice-cream which offers plain protection at a low cost.

• Pro: It is probably the cheapest type of insurance. Its low cost rates allow policy holders to buy policies with larger face values.
• Con: It expires. It means that when you outlive or cancel your policy, you get nothing back.

Affordable Life Insurance

After understanding the types of insurance available for you, you could decide which one would work best for your needs and goals. Another factor that might come into play when purchasing insurance is the cost.

If you think that another chunk of your monthly income would be taken out and go to insurance, there are other ways that insurance can be made affordable for you and your family. OnePath provides some solutions that can greatly benefit you without paying a huge amount of money.

• Buying your life insurance through your super. You can make a lot of savings when you purchase your life insurance through your superannuation. For one, you can claim tax deductions through your super. You also get a free pass on your medical because no further medical proof is needed when you buy your insurance through your super.
• Partner Cover Discount. Some insurance providers, like OnePath, give discounts off the premiums when a couple apply together.
• Premium Freeze. If you happen to be unemployed and can’t afford to pay the premiums, OnePath has a flexible feature where you can put a hold on your premium until such time when you are ready.

Life Insurance and Superannuation

Using your super funds to pay for your monthly premiums can save you a lot of money compared to purchasing a stand-alone insurance policy. Insurance which is funded through superannuation is usually tax-deductible. Other reasons why it is a good move to purchase life insurance through your super are as follows:

• You will be able to pay less because super funds buy insurance in bulk.
• You have a tax advantage because the premiums are paid from your super account and not from your after-tax income.
• Since your premiums are automatically deducted, it is easier to manage than when you buy a separate insurance.
• You are saved the hassle of providing additional medical proof since it is not required that you provide one.

There are a lot of advantages when enrolling your life insurance with your super fund. However, you should be aware that there are certain limitations of life insurance through super.

• There may be a limited level of cover.
• If you try to move or consolidate your super funds, your cover may end without notice.
• Some benefits may be taxed
• You might need to purchase another policy outside super to top up your insurance policy.

Life Insurance and Your Estate

Life insurance is not just about providing you and your family with a lump sum to help with the medical and funeral expenses. Nowadays, it is plays a vital role in planning your estate. It can help you pay off mortgage, provide for your children’s education, and help your family financially when you die. Other ways how life insurance can be very beneficial are:

• Provide funds for your family. Death can be stressful, both financially and emotionally. Life insurance can help the stress of the surviving family financially. It would make them easier to cope when the financial side is taken care of.
• Redistribution of your estate. Being fair to your kids is very important. It keeps your legacy alive. Life insurance can help your legacy live on by providing an avenue how to redistribute your estate in a fair and satisfactory manner which benefits all.
• Protects your second family. It is a fact that one-third of Australians have been married twice. Thus, there is a need to protect both families.

There are a lot of ways that life insurance can help you and your family both in life and in death. From your income to your house, OnePath provides a solution to your insurance needs by giving you flexible options. You could begin protecting your family by contacting a financial adviser to help you decide a good strategy.