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Insurance – how much do you need?

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You probably already have your car, your home and your health needs covered. But have you thought about insuring your family’s most important asset—your ability to earn an income? As well as life insurance, you can also protect yourself against loss of income, disability and specific trauma events.

When you’re insuring your car or home and contents, it’s fairly straightforward to work out how much cover you need. But when you’re insuring yourself it can be a bit trickier. It’s worth thinking about how your family would cope if you weren’t able to earn an income and care for them.

Getting the right cover

Protecting yourself and your family may not be as expensive as you think. Taking out $500,000 worth of AMP Elevate life insurance with a total and permanent disability (TPD) option works out at $37.85 a month for a 30-year-old female non-smoker in New South Wales and $45.93 a month for her male equivalent. 

That’s just $1.24 a day if you’re a woman and $1.51 a day if you’re a man. It’s less than your daily coffee—a small price to pay to protect the ones you love.

When working out how much cover you need, you’ll need to take into account a number of factors, including your age, health, gender, income and family situation.

You should also ask:

  • ·        How much debt are you paying off?
  • ·        What expenses would your family face in the event of your death, like funeral costs?

Life insurance can protect your family in the event of your death by helping them pay outstanding debts and maintain their lifestyle. But there are other types of insurance that can help you pay your bills and meet your home loan repayments if you’re ill or injured, subject to meeting certain conditions.

  • ·        Income protection pays you a regular benefit to replace your income in certain circumstances.
  • ·        Trauma insurance pays you a lump sum to help you adjust your lifestyle after you experience a serious illness or injury.
  • ·        TPD insurance pays you a lump sum if you can’t work again due to illness or injury.

When you’re taking out insurance cover, you should always read the Product Disclosure Statement carefully to ensure that the product is suitable to your needs.