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Could you be overspending on Life Insurance?

ADVERTORIAL: Presumably, overpaying for life insurance is the last thing you’d want to do. If you haven’t reviewed your insurance for some time, it may surprise you to find out that is what may be happening. You may already be overpaying for life insurance.

Could you be overspending on Life Insurance?
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There are several factors that can cause you to overpay. You might have started off with the wrong insurance or, maybe you bought a term life insurance policy when your existing life policy inside your super is providing adequate cover in the circumstances.

Whatever the case may be, a thorough life insurance comparison can show you what’s going on. It might also help inform you about some possible changes.

Three Signs That You May be Overpaying for Insurance

1 You Have Insurance That You Don’t Need

Life insurance is likely a good idea when you have other people who depend on you financially. Or, you might have a mortgage or other debts that could burden your loved ones financially should you die prematurely. Finally, life insurance cover could help cover the education costs of your children if you pass away unexpectedly.

Meanwhile, people who are single, just starting their careers, are not planning to buy a property and have no potential debts or big future expenses may not need life insurance yet but may consider products with living benefits such as Income Protection Insurance.

On the other hand, if you’ve already paid off the mortgage and are enjoying retirement, it might be prudent to review your policy. Once your children have grown up and maybe take on life insurance of their own, they may no longer depend on you financially. With no debts left and a retirement nest egg to cover the finances, your policy might not be needed as much as it was before because your circumstances have changed in the meantime.

2 You Bought the Wrong Type of Insurance

If you’ve joined a super fund, you might already have life insurance. However, it is now no longer compulsory to have life insurance cover inside your super. Prior to this change, many people did not know they had life insurance as part of their super fund.

This could mean that you might be paying for term life insurance bought direct or through an adviser in addition to the life insurance within your superannuation.

Note that although life insurance through superannuation is typically cheaper it tends not to be fully underwritten and as a result often comes with broader pre-existing condition exclusions.

However, people need to consider not only the possibility of broader exclusions, but also whether the sum insured for life cover within their superannuation is adequate. By examining your potential expenses and debts, you could find out if you need an additional top up policy.

3 You’ve Overestimated How Much You Need

A straightforward formula used by many when working out how much life insurance they need is to multiply your annual salary by six to ten times. In addition, there are many free online life insurance calculators that can be used as a tool to help people think about how much cover they may need.

It’s usually a good idea to be clear about your specific objectives such as being able to pay off the mortgage, cover living costs and looking after your family’s financial future.
It’s important to review your cover terms periodically, especially if your life circumstances change. Should you want to amend the cover level of your insurance to reduce your premiums, always check with your insurer.

Taking out life insurance may be one of the most important financial decisions you can make. While they can’t give you advice on the above, to find out more about NobleOak Life Insurance or to get a quote from NobleOak, speak to their friendly team on 1300 108 490 or visit www.nobleoak.com.au/ipa for an online quote.

Important Information
This article has been written by NobleOak Life Limited ABN 85 087 648 708 AFSL No. 247302. Please note, cover available to Australian residents only.
The Target Market Determination for NobleOak’s Premium Life Direct insurance is available at www.nobleoak.com.au/target-market-determination
NobleOak Life Limited ABN 85 087 648 708 AFSL No. 247302 issues the products. This information is of a general nature only and does not take into consideration your objectives, financial situation or needs. Always consider the Product Disclosure Statement (PDS) (available at www.nobleoak.com.au) to see if the product is right for you.

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