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The three moments when you should consider life insurance

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There are certain times when something or someone makes us realise what's important in life, and drives us to consider how we can protect it.

The right life insurance can help protect your income and relieve financial stress if you find yourself off work for an extended period of time. Whether buying a property, starting a family or embarking on a new job, here's how to safeguard your financial future.

Buying a property

Investing in property is an exciting milestone and for most of us it's the biggest financial investment we will make.

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In the event of life's unexpected challenges, such as accidental injury or prolonged illness, it makes sense to think about how you would pay the mortgage if you can't work temporarily, or even permanently.

A good place to start is to assess your own personal situation and whether you and your loved ones could meet your mortgage repayments if you were unable to work.

Income protection is an option to safeguard your finances so you can continue living your life should an injury or illness prevent you from working.

It provides an alternative source of income in the form of a monthly payment for a nominated period of time to help you keep your life up and running, and take the financial pressure off while you concentrate on getting back on your feet.

Starting a family

Whether you're about to have your first child or are already a family of four, you need to ensure you provide financial security for your family.

It's important to acknowledge what the impact would be on your family's day-to-day life if they didn't have your income. In the instance where you have shared financial obligations, it's important to assess whether you and your partner could maintain your lifestyle if one of you were unable to earn an income.

With the potential to cover school fees, living expenses and the ongoing wellbeing of your loved ones, life insurance can help secure the future you envisage for you and your loved ones.

Life insurance typically includes some combination of income protection insurance, total permanent disability insurance should you be permanently unable to return to work, recovery insurance to cover you in the event of a serious illness, and life insurance providing your family with a lump sum payment if you're no longer around.

Embarking on a new work venture

Getting a new job or starting your own business will involve changes to your financial situation.

Employers and the government provide a certain level of cover in the event of illness or injury, but in most cases the cover provided through WorkCover and public welfare schemes does not provide adequate protection. So, it's important to check the cover that's included through your super fund or employer to ensure you're not caught out.

For the self-employed business owners and contractors, it's important to note that the workers' compensation scheme only provides payment for illness or injury that may arise out of employment and by law the self-employed do not meet this definition.

Do your research and speak with a financial adviser, opting for an insurance provider that can tailor the cover to meet your needs and relieve financial stress in difficult times.

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