Life Insurance

Life Insurance cover (also known as Death or Term Life Insurance) pays a set amount of money as a lump sum when you die. Most term life policies will pay out a lump sum of money if you are diagnosed with a terminal illness and given only a certain life expectancy – up to 12 or 24 months, for example.
If you die, the money will go to your estate or to the people you have you nominated as beneficiaries, such as family members, who can then use it to help pay off debts. For instance, the money can be used to help clear a mortgage, household bills, fund the costs of the children’s education, or provide an ongoing income for a number of years. In fact, the funds in the event of a claim can be used for any purpose.

At NobleOak we offer comprehensive fully underwritten Life Insurance – this means when you apply for cover we ask you more health, occupation and pastime questions, and may require a medical examination. If the doctor’s report or blood test is required – we arrange these at our cost. This process can take a bit longer upfront, but most importantly, we take all the worry away so there is more certainty at claim time.

Life Insurance Premiums and Policy Renewal
Your premiums are calculated based on things like your gender, age, smoking status, occupation, health, and lifestyle status.

Your policy is renewed annually, with premiums usually increasing as you get older (commonly known as ‘stepped premiums’) and as your level of cover increases to keep up with inflation (commonly known as ‘indexation’).

The cost of premiums is perhaps a reason why a number of older Australians aren’t taking out life insurance.

But the good news is, the premiums for those in their 50s might not be as high as you suspect.

Sure, age is one of the main factors that influence the premium. It’s simply because you’re at a higher risk of becoming a claimant when you’re older.
However, your premium will still tend to be noticeably lower that for someone in their 60s. Also, premiums will vary from one person to another based on the following:

• your current health
• your smoking status
• the level of cover you attain
• your lifestyle pursuits
• your occupation

In addition, insurers may require you to undergo a medical exam to determine your health status. Still, you might be pleasantly surprised if you compare some quotes and policies for life insurance cover. Your premium may not be as expensive as you think as long as you’re in good health and don’t lead a lifestyle or engage in an occupation that carries higher risks.

Having the right amount of cover is important. However, many Australian families remain underinsured.

If life took a turn for the worse, you wouldn’t want your family to suffer the additional stress of not being able to pay the mortgage or essential ongoing household bills, on top of dealing with the emotional distress that your loved ones would be experiencing.

Calculating the cost of Life Insurance
When selecting how much Life Insurance coverage you may need, it’s important to consider your level of debt and ongoing expenses, and the lifestyle you wish your family to maintain if you were to unexpectedly pass away.

For example, it can be helpful to think about your current household living expenses, your mortgage or other debt and the type of education and support you’d like for your children now and in the future. This can help you calculate the level of cover you will need to financially protect your loved ones.

A ‘rule of thumb’ people often use to calculate the level of Life Insurance (Death) cover suitable to them, is to multiply their salary by 10 to 20 times. This is one approach to provide a general idea of how much cover might be needed, but there are of course others. People often use a higher multiple when they have younger children with high dependency.

If you’re responsible for looking after the home, you may need to consider the cost of accessing external childcare and home support to manage the household should you no longer be around.

Flexible Life Cover to suit your needs
The good thing about Life Insurance is you can tailor the level of cover to your individual circumstances and then adjust it according to your budget. Above all, it’s most important to ensure that your loved ones are adequately financially protected.

With NobleOak, you have the flexibility to apply for Life Insurance cover up to $25,000,000.

If you are still unsure how much cover you might need to protect your loved ones, NobleOak’s Life Insurance calculator can help guide you.

Here are some reasons to be thinking about life insurance cover in your 50s:

1. Protecting Your Family from Outstanding Debt
A lot of seniors in their 50s have made great progress in reducing, or even clearing their mortgage, but there could be other debts from investments or properties.

Sure, some investments may have equity. But if your family needs to sell off the asset because they can’t cover the debt, the value could dwindle.
To prevent that, you may wish to consider attaining an adequate amount of Life Insurance to help cover the debt should you pass away.

If you do, The debt wouldn’t fall on your family and the investment could be retained for its intended purpose, such as for the children to inherit or to become part of your partner’s retirement plan.

2. Removing Uncertainty
For many people over 50, financial circumstances change. Your children might have finished schooling and started earning their own incomes. But that’s not set in stone.

There’s a possibility that your children’s circumstances may change and come back to live with you. Beyond that, you might also have to provide for your grandchildren.

Your Life Insurance may be able to cover these types of expenses if you’re no longer around to help provide for them.

3. Fair Split of Your Estate
To avoid any conflict within the family, you’d probably want to ensure your family members get a fair split of your assets.

It’s not uncommon that one’s asset portfolio may be complicated and that there may be a significant asset that’s hard to split without losing value. This is often the case with small businesses and farms.

If you have Life Insurance, that’s something that can go into the overall mix as an additional asset, allowing greater diversity and possibly increasing the options available when it comes to ensuring a fairer split of assets when you pass away. Estate planning is complex, though, so it’s often a good idea to get professional advice on wills and estate matters.

With age, it’s natural to think more about how to help your dependants maintain their lifestyle should the unexpected occur. It’s true that you’re at a higher risk of illness or injury, which will drive up the premium. But this doesn’t mean you can’t get adequate cover without burning a hole in your pocket.

Here’s some information which can help you think about a policy that covers your needs, with an eye on your budget.

1. Check Your Health
Most insurance providers will ask you to go through medical testing before you take out a policy. If you have any medical conditions or a lifestyle that is classified as risky, these will affect your premium.

Also, it’s important not to hide any medical conditions you may have. Doing so may well give an insurer a valid reason to reduce or refuse payment in the event of a claim.

2. Make Sure to Understand the Benefits and Features
When you take out an insurance policy, there will be certain terms, conditions and exclusions attached to the benefits and features of the cover that you should take the time to understand.

Many policy documents are written with jargon free language, so they are easier to understand than you may think.

Look out for any ‘pre existing condition’ clauses or if there is anything that seems out of place. Don’t hesitate to ask the insurance representative to clarify things for you.

More importantly, you don’t need to jump at the first opportunity that comes your way. It’s okay to shop around until you find the right product.