Why You Should Have Life Insurance
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Life is full of uncertainties. While we can’t predict what tomorrow will bring, we can take steps today to protect the people we love most!One of the most important ways to do that is by having valid Life Insurance and Total Permanent Disability (TPD) Insurance. Yet many Australians still overlook this type of insurance, thinking it’s either unnecessary, too expensive, something to “deal with later,” or in reality, that the default amount in their super fund is enough to support their family. The reality is, life insurance is a cornerstone of financial security that needs to be considered regularly and not just as a set and forget — and here’s why.
The primary purpose and consideration of valid Life Insurance and TPD is simple: to provide financial protection to your family if you’re no longer there to provide for them. The payout from a policy can cover essential expenses such as mortgage repayments, school fees, or everyday living costs. It helps ensure your family’s lifestyle isn’t upended by financial stress during an already difficult time.
Most default policies in super funds don't consider the major costs that would be impacted in the event you need to make a claim.Some further detail on the items to consider include:
1. Paying off your mortgage
Most default policies (if you have one at all) may not cover current levels of mortgage debt a family group may have. With mortgages becoming significant, the expectation that your surviving family (or supporting family in the case of TPD) can cover your mortgage in the event an issue occurs can become significant indeed. Insurance that considers your debt levels may assist in reducing this being an issue.
2. Replacing Lost Income
If you are the main income earner in your household, a valid Life and TPD insurance policy acts as a safety net along with covering your debt above. A successful claim aims to replace part or all of your income you can't earn in the event you need to claim, helping your family manage bills and long-term commitments in your absence. Even if you’re not the primary earner, your contribution — whether through part-time work or unpaid household responsibilities — has significant value that would be costly to replace without considering insurance.
3. Covering other Debts and Final Expenses
Most families carry some form of debt or expenses outside their mortgage — whether it’s a car loan, business loan or credit card balance. Without a valid insurance policy covering life and TPD, these obligations could fall to your loved ones. A valid policy ensures debts are cleared, and it can also cover final expenses such as funeral costs, preventing your family from having to bear an unexpected financial burden.
4. Peace of Mind for your Family
Life insurance isn’t just about money — it’s about peace of mind. Knowing that your partner, children, or other dependents will be financially supported if something happens to you can ease worry and allow you to focus on living in the present.
5. It’s More Affordable Than You Think
Many people overestimate the cost of Life / TPD insurance or assume their current default insurance is fine. In reality, policies can often be tailored to fit your needs and budget and may actually be affordable against your current policy, when considering a longer time horizon. The earlier you take out a policy, the cheaper it can be noting that there are several options available to keep cost down with strong features that may be favorable against a default option.
6. Inside or Outside of Superannuation
Most policies are in super but there can be tax implications, meaning in some cases cover outside of super could also be considered. A financial adviser can assist in considering what approach best suits your personal circumstances.
Final Thought
Life and TPD insurance is one of those things you hope your loved ones never have to use — but if they do and have a valid policy with a successful claim, it can make all the difference. It transforms uncertainty into security, protecting the people who matter most from financial hardship. Think of it not as an expense, but as an investment in your family’s future.There are a lot of things to consider and that is where we come in.
Note: Simaco Partners is the trading name of Simaco Partners Pty Ltd
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Simaco Finance is the trading name of Direct Finance Solutions Pty Ltd.
Stephen George Nikolovski is a MFAA Approved Broker (number 386328) and is a credit representative (number 500383) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit License 391237).
Direct Finance Solutions Pty Ltd is a credit representative (number 500306) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit License 391237).
Simaco Financial Advice is the trading name of Direct Financial Advice Pty Ltd which is the trustee of the Simaco Financial Advice Unit Trust ABN 91 753 408 234. This company / trust and Stephen George Nikolovski are Authorised Representatives of Lifespan Financial Planning Pty Ltd ABN 23 065 921 735 Australian Financial Services Licence 229892.Disclaimer: The above is merely general commentary and is not a statement of fact or assertion of expected outcomes. It does not consider your personal circumstances. Please consider whether any proposed credit contract and what structure of loan (e.g. fixed or variable etc.) is appropriate for you and read any relevant disclosure statements and/or speak to an appropriately qualified legal professional / seek financial advice before proceeding with any course of action. Loans subject to approval and credit criteria, including any loan conditions imposed by the financier. If you wish to discuss your personal circumstances further, please again feel free to contact this office.This e-mail and any attachments to it (the "Communication") is intended for the individual or entity named and may contain information that is confidential. If you are not the intended recipient of the Communication, you are notified that any use or dissemination of this communication is strictly forbidden. If you have received this message in error, please notify the sender immediately by return e-mail, delete the Communication, and do not read, copy, print, retransmit, store or act in reliance on the Communication.
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