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I’m healthy so why would I need life insurance?

Published on November 26th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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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.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.

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