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Why do you and your family need life insurance?
You insure your car in case you're involved in an accident, you insure your home and its contents in case of fire or theft, you even insure your health in case you get sick – why then do only 1/3 of the working age population have income-protection cover*?
We understand that it's a hard conversation to have with your partner or your loved ones about what you would do if you couldn't work or if you died. How would your family cope if you were to be severely injured? How would they meet your financial commitments?
Help cover for your family if you can't work due to sickness or injury, or you’re terminally ill, or you pass away
There are generally two kinds of insurance you can take out to help you keep up your financial commitments if you were sick, injured, or died. They are Income Protection and Life Insurance.
If you can't work because you are ill or injured, Income Protection Insurance could help you or your family cover some of the lost income while you recover, so you can continue to pay the mortgage or rent, day-to-day living expenses, and other bills you might normally have.
When it comes to Life Insurance – you'll probably need to have some hard conversations about the practical importance of being prepared for death. You might consider this by yourself or with your family. Either way, it is important to consider what could happen to your finances, and who will take care of them, after you're gone.
*Vanguard Australia Closing your insurance gap summary, 2018