Buying life insurance can be one of the most important things you do to help protect your family’s future when you’re no longer around. At Direct Cover, we know that understanding the right amount of cover is key to help protect the life you’ve built. Whether it’s for mortgage repayments, outstanding debts, or if you’d simply like to leave a gift behind, we’re here to help you find the right amount of cover for your budget.
Who do you want to protect?
When determining the right amount of life insurance cover, it’s crucial to consider who you want to protect. Life Insurance is all about providing a financial safety net for the loved ones who depend on you the most. This could be your spouse, children, or any other dependents who rely on your income and support. Think about short-term needs, like rent as well as longer-term costs such as mortgage repayments and education costs. With Direct Cover Life Insurance, you can get up to $1.5 million of cover, depending on your age.1 This can provide a simple way to help protect the financial future of your loved ones.
Evaluate your financial obligations
Outstanding debts can add up quickly. That’s why it’s so important to calculate how much you owe on costs such as mortgage payments, car loans, credit card debt, and any other financial commitments. Consider your everyday expenses, including utilities, groceries, childcare, and other recurring bills. Factor in your future financial goals, such as funding your children's education. At Direct Cover, we want to help you choose a policy that provides some financial protection while allowing you to manage your budget at the same time. Calculating any of the above that applies to your situation can help you get started.
Estimate your family's future expenses
How much income would your family need to maintain their current lifestyle? Take some time to think about how much it takes to keep things running smoothly – from covering education costs and medical bills to accounting for inflation and the rising costs of living. It’s also important to consider potential future expenses, such as supporting your children’s education or paying off outstanding debts, to ensure your family will have some help when the time comes.
Assess existing savings and assets
Take into account your existing savings, superannuation, or any other financial assets your loved ones could rely on. While these may help, they may not be enough to cover all ongoing costs or unexpected expenses.
Consider your spouse's income
If your partner contributes to the household income, it’s important to think about how their financial situation might change without your support. Would they still be able to cover the mortgage, pay childcare costs, or manage everyday living expenses? At Direct Cover, we understand how affordability is key to ensure some financial support for your loved ones. That’s why you can choose to pay fortnightly or monthly, giving you the flexibility to budget in a way that suits you.
Factor in funeral and estate costs
In Australia, average funeral costs can vary anywhere from $4,000 to $15,000.3 These costs can change based on things like the territory you’re in and whether you want to have a basic cremation or more elaborate burial ceremony. This doesn’t include any additional estate or legal costs that might arise. These expenses can put unexpected financial strain on families.
Review your cover regularly
Whether you’re buying a home, growing your family, or simply paying off debts – life changes all the time. It’s vital to review your life insurance regularly to meet your needs as they evolve. This way, you can be confident that your policy continues to provide the right level of protection as your circumstances evolve.
Reviewing life insurance through superannuation
If you already have life insurance through your superannuation, you might think that’s enough to protect your loved ones. However, this type of cover typically offers a lower level of protection and may not account for all your family’s financial needs. It’s also important to consider whether additional life insurance is necessary.
Helping protect the life you’ve built
There are many things to consider when choosing how much life insurance you need, but straightforward cover is available. At Direct Cover, we are part of a global network whose brands have been chosen by over 500,000 customers globally and are rated 'Excellent' by thousands of customers on Trustpilot.4 We want to help you find some financial support and our team of Australian-based life insurance specialists is ready to answer any questions you may have. If you’re interested in securing your own cover over the phone, or if you’d simply like to learn more, feel free to give the team a call on 1800 583 675.