BACK to BASICS: What is life insurance?

Life insurance is “help your family” insurance. It provides a lump sum payment upon death (or if you are diagnosed terminally ill) so your family continue to live the lifestyle you’ve planned together.

Life insurance gives you the confidence to seize life’s possibilities knowing you’ve made plans to secure your family’s future. It means that you can focus on living life without worrying about finances. Should anything happen to you, you know that your family:

  • can stay in the family home (pay off the mortgage or cover the rent)
  • keep the kids at their school and make future education plans
  • meet their ongoing, day-to-day living expenses.


Life insurance and superannuation

Lots of people already have some life insurance through their super as part of their employment arrangement. Even though there are some positive aspects to having life cover within your superannuation fund (for example, cheap premiums), there are things you should be aware of.

Often these funds don’t provide enough cover and there are additional rules and restrictions when making a claim. Your family is not guaranteed to get your life insurance money upon your death – there are criteria that must be met first.

It’s important to speak to a financial adviser about your situation and needs before you take out any type of cover. A financial adviser can set up your life insurance in an appropriate way for you.


How much do you need?

You and your family are unique – and ‘family’ means something different to everyone. So, the amount of life insurance you will need is different as well. There is no set amount of Life insurance that anyone ‘should’ have.

The amount needs to be calculated based on a number of factors, like your:

  • income – how much you earn today (and how much do you expect to earn in future)?
  • dependants – do you have children or other people who are dependent on you financially?
  • debts – do you have a mortgage, loan or other debts?
  • assets – have you accumulated any assets over the years, like property or shares?


Life insurance calculators can give you an indication of how much you may need, however you should always speak to your financial adviser. They understand your individual circumstances, and make sure you have the right amount of cover and the right policy to meet your unique needs, at a cost that you can afford.

Chris Black is an award-winning financial planner based in Toowoomba who specialises in personal insurances including life insurance, income protection, total permanent disability and trauma insurance. To discuss your insurance protection needs, please email us at or book online.


Written by Emma Linton Doig, Practice Officer at Fortress Financial Solutions

Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.

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