Do you consider life insurance to be a big deal? With insurance policies expensive and the premiums going up, one listener asked for advice on 2UE’s On the Money, from finance experts Peter Switzer and Paul Rickard.

 Life insurance can be a lifesaver if picked correctly, but it’s not for everyone, according to Paul Rickard from the Switzer Report.

 “If you don’t have a mortgage or dependents, I’d question why you even have life insurance,” said Rickard.

 According to him, the first step is to think about what life circumstances you need to cover. This might include your children’s education, mortgage repayments, your occupation and how much income your family will need in order to live comfortably.

 “You have to look at why you need it. If you have an outstanding debt, a mortgage or a health-related illness and you have companions or a family, then it’s worth getting. If you’re not in that situation then I would question it,” Rickard said.

 Secondly, you need to look at how you’re going to buy your life insurance. Will you be buying it inside of your super or outside? It matters because it can be more tax effective inside your super, according to Rickard, and may not be worth it otherwise.

 When selecting a policy, look at the cover level and what it pays out with different benefits and according to different circumstances, he noted.

SUPER COVER 

 Many people don’t realise that if you’ve got superannuation cover, you also have life insurance cover, Peter Switzer noted.

 “Have a look at your superannuation policy and see what kind of insurance cover you’ve got. If it isn’t enough, go and get some more,” he suggested. “Within your super policy, you may be able to upgrade to the level of insurance that is in the standard offer.

 “If you are going to go looking for insurance outside of your super, go to three or four different insurance brokers… there is an enormous difference between what they charge.”

 “Some of these brokers are great while others are just sellers, and the policy may benefit them more than you!,” he said.

TERM INSURANCE

So, you know you want to have a bit of extra protection. Term life insurance and whole life insurance keep coming up in conversation, but you aren’t sure what the difference is.

Term life insurance premiums are generally there to provide a death benefit to your beneficiaries if you die during a specified term. That means it’s purchased for a specific period of time.

Whole life insurance covers you for life. It not only provides a death benefit but also a cash value is accumulated during the life of the policy.

At the end of the day, if you don’t want a policy that costs an arm or a leg, then term life insurance might be your best bet.

Listen to the full interview above to find out more about finding the right life insurance for you.