Living in a country like Australia can offer a great quality of lifestyle, but it can also prove to be a slightly expensive affair. Now, Perth is known to be among the largest cities of the country. In fact, it is the largest city in the state of Western Australia and houses a population in excess of 2 million. It is also one of the most isolated metropolitan cities in the country, and this has caused the lifestyle of the city’s population to not only be of high quality, but greatly expensive too.
Under these circumstances, the people of the city are often forced to look for ways to earn extra money above their average monthly income. They do this in order to ensure that they are able to maintain their costly and high-standard lifestyle. One of the best ways to do so is to invest in life insurance policies.
Why is life insurance a necessity?
There are several reasons behind the tremendous importance that life insurance is often associated with. Some of these are:
- They offer essential support to people in times of critical health concerns.
- They offer financial support to the family of the owner in case of their death.
- They offer financial relief for the kids to continue their education.
- They help the family to cover funeral arrangement, which often tends to be expensive.
People who absolutely need life insurance
Some of the people who should absolutely opt for the best life insurance Perth WA policy include people who have a number of members in the family to support. Even married couples, both old and new, must have life insurance which can come in handy in times of financial crisis. Moreover, it must also be incorporated in the plans that a family make for a prosperous future.
Life insurance as investment opportunities
When talking about life insurance, people usually relate it to a security measure to help them or their families in times of need. For instance, in times of an accidents or death in the family, the life insurance policies can be of tremendous help as financial backups.
However, in recent times, people have also started to look at them as great investment opportunities. When a life insurance is chosen on the basis of a few considerations, they can prove to be the best tools of investments as they offer great returns apart from the security aspects.
Types of insurance based on time period
Usually, there are two major types of insurance that a person can opt for. The first is the term insurance policies that span over a period of 5, 10, 15, 20 and 30 years respectively. These are often considered to be short-term insurance policies, and do not always offer the best returns. For instance, if a person is aged in their mid-20s and takes a 30 year plan, the policy term would end in their mid-50s. In case they live through to that age, getting a fresh insurance policy at that age could become a slightly more expensive affair.
On the other hand, in case of death of the policy owner within the insurance term, the beneficiaries get the face amount in its entirety without having to pay any taxes. In such scenarios, the returns on the investments become tax-free, and the beneficiaries become the gainers.
The second type of insurance policy is the Whole Life Insurance, and these policies cover the owners for their entire life span until they reach 100 years of age. These policies are popularly called the permanent insurance solutions because as long as the premiums are paid, the owners are insured up to the age of 100 years. Opting for a policy with a whole-life term can be a great option as this allows the owners to leave their families substantial financial relief in case of death.
Moreover, the policies are also priced high in comparison to the term insurance policies, but they also have greater cash values than the latter. If the premiums are paid in time, the policy tends to accumulate cash value over time, and this can then be borrowed by the owners in times of need. Moreover, the premiums usually need to be paid over a period of 15 or 20 years, after which they become paid up. Following this period, the owners do not have to pay anymore in premiums.
However, the cash value of the policies still continues to grow even after the owner stops to pay the premiums. After this, the owners can borrow from their insurance companies when they have the need for money to manage their finances, and do not have to resort to third party lenders. Moreover, in case of death, the beneficiaries receive the entire Life Insurance Perth maturity amount as tax-free income.
Some common reasons that often cause people to not opt for life insurance cover
There are several reasons why people usually avoid life insurance. Some of these reasons have been mentioned below.
Saving is a better option: There are many people who consider saving money to be a better option than investing in a life insurance cover. However, the truth is starkly contrasting for the simple reason that saving a substantial amount of money can take a long time. On the other hand, life insurance cover ensures that the return is higher than the invested amount, and the premiums also have to be paid over a span of time.
Circulating stories of a few bad experiences: A life insurance policy will not cover every aspect of a person’s life. There are certain scenarios that life insurance will cover, and then there are those that it will not cover. It is important to carefully understand what a policy covers and what it doesn’t before opting for one such policy. This will help a person to opt for the best policy according to their needs, and will also help them to understand under what circumstances they will be offered cover by the insurance company. Failure to do this will cause a situation to arise where the person has paid the premiums in time, but not being offered the assistance in times of need.