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Protect your family with family life cover

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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Families need to consider taking out family life cover

Losing the main breadwinner in a family can be stressful for a family. If they have taken a life insurance policy before they have passed on, a lump sum will be paid to the family to ensure that they are taken care of financially. However, a standalone policy might not be sufficient to handle the ongoing costs that might arise, especially if a family member falls critically ill. 38% of Australian families are underinsured when it comes to protecting their families. Family cover ensures that should any additional costs arise that won’t be paid by the standalone policy will be taken care of. Should your partner or spouse have to stop working their income will be taken care of, leaving them with one less problem to worry about.

Knowing if you are eligible for family life cover?

If you are planning to start a family or already have a family then you are eligible for family life cover. If it is just you and your spouse and there are no children in the picture you can still take out a policy to protect your loved one. Family cover can be taken out as a joint life insurance policy that protects the policy owner and their spouse, or as an additional benefit for a child or spouse.

Taking out adequate cover

Before you take out family life cover it is important that you consider the ongoing costs that come with the passing of a loved one. Especially if they are the breadwinner. This will ensure that you take out adequate cover which doesn’t see you being underinsured when you need it the most. Many families fail to get the right cover for their families.

The average middle-income family in Australia with two children ensure their family with $258,000 worth of life insurance. The typical family needs $680,000. This is a $422,000 shortfall. You will have to consider your family’s situation, along with the ongoing costs that they will have to deal with when you pass on.

Check the flexibility of the policies features

Not all policies are created equal. When it comes to taking out family life cover the most important thing that you can do is compare its features to find something flexible. Most policies will allow the flexibility of adding on another beneficiary when you are extending your family, but you can look at other features such as:

  • Range of medical conditions that are covered. This will help you know whether your policy covers a range of different medical conditions in order to protect your loved ones.
  • The number of children covered. Does the policy have a limitation to how many children you can cover?
  • Inflation protection. Will the amount you have insured for your family increase with inflation? This usually increases by 3%-5% on the anniversary of your cover.
  • The maximum sum that can be insured. Some policies have a limited amount in which you can be insured for. Some insurers limit the average cover from $300,000 – $1,000,000. Checking this figure out will help you know if your family will get adequate cover.

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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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