When you are at the prime of your health, life insurance might be the last thing that you would be thinking about. However, there are benefits of getting life insurance while you are still healthy. Life insurance policies are split into TDP, income protection, income protection and Critical illness cover of which you can choose from to slowly build your policies to something substantial. Here are a few reasons why you need life insurance while you are still healthy.
Your health influences the underwriting process
When it comes to life insurance policies there are a few things that an insurer will look at to know how much cover you will need. Unfortunately, research conducted by Association of Financial Advisors revealed that 29.3% of Australians rated life insurance as something important. This has resulted in half of the Australians population being underinsured by $100,000 when it comes to life insurance.
Your health is one of the largest contributing factors which will influence the level of cover along with your premiums. The healthier you are the more affordable your premiums are likely to be. Your age and gender also affect how much you will be paying in premiums.
The reason for this is that insurers use statistics to rate how much of a risk you are. There are currently 2.6 million smokers in Australia who not only put themselves at risk but also those around them.
This can influence what you end up paying on your life insurance. People who smoke will pay 2 – 3 times more on their premiums when compared to someone who does not smoke. For example, a 35-year-old male smoker who takes out a life insurance could pay $800,000 will pay $81.20 on their monthly premiums. While a 35-year-old male who does not smoke will pay $41.43.
It can happen to you
Being healthy can make us feel invisible to life’s curve balls in our life, but if you have not taken out a life insurance policy this can be a risky game to play. Life insurance is there to protect you when you need it the most. It is a financial shield to ensure that should you fall critically ill or sustain an injury that puts you out of work you still have some source of income to sustain your lifestyle. It also eases the stress knowing that if any of your ‘what if’ moments do come true you are protected financially.
The carpet can be pulled out from underneath you at any moment should you be involved in a car accident, find out that you have cancer, or even be retrenched. By building your life insurance policies while you are still healthy you will be able to have a strong policy that will pay you adequately to ensure that you have peace of mind while your policy pays off your financial commitments.
It is not expensive as you think
You might be thinking that skimping on your insurance will help you save a couple of dollars that could be used elsewhere, but in reality, you are skimping on your quality of life. According to Life Wise 81% of Australians believe that life insurance is expensive. However, when the very same people check for life insurance quote 61% had overestimated the initial cost.
How much you end up paying on your life insurance policy will differ from person to person, as insurers will look at various factors to determine it. Paying out a small amount of money to protect you will be worth it when you need it the most. Anything can happen in life, but at least you could financially prepare yourself before it does.