The Financial Planning Association of Australia The Financial Planning Association of Australia

Peace of mind for all those bills, bills, bills

Insurance for the family

Life has never been so full of joy but full of responsibility. Between the ages of 35 and 50 Australian families are likely to face a large mortgage on a family-sized home, little mouths to feed and big electricity bills. Not to mention school fees, childcare and a second car (essential for the myriad weekend activities). If something goes wrong, you don’t have a lot of wriggle room.

Statistics from the ABS show that 93% of families with children under five have household debt that is, on average, more than 2.4 times their annual income[i].

The risks you face

Every year that goes by, sees you at increased risk of suffering a major health trauma, such as cancer, heart attack or stroke. Meaning you could be facing an extended period of time out of the workforce without a savings pool to call on.

The loss of a family’s main breadwinner can have a significant impact on the surviving members’ lives moving forward. Ongoing mortgage or rent repayments, credit card debt, education fees and everyday bills still need to be taken care of, even after you’re gone. Even if you are a ‘stay at home’ parent performing ongoing home duties, your loss may require your remaining spouse to pay for services to look after the home and care for your children.

By taking out life insurance, you give yourself and your loved ones the peace of mind that a lump sum will be paid on your death or diagnosis of terminal illness to allow your family to continue to live normally and prevent other assets being sold.

In addition to life cover, there are other forms of insurance to consider falling under the umbrella of ‘living insurance’ including:

  • Income Protection that can provide you with an ongoing monthly benefit of 75% of your regular income if you are forced to take time out of work due to serious illness or injury.
  • Trauma insurance that can provide a lump sum payment to cover costs if you suffer a trauma condition as specified by your insurer
  • Total and Permanent Disability insurance can provide a lump sum benefit if you are forced out of work due to disablement.

An option to consider is funding your insurance through super, which can be done for Life, Income Protection and Total and Permanent Disability.

Maximising value in insurance should be your main objective

Whilst only a professional financial  planner can tell you whether you need life insurance and if so, what type and how much, it is highly likely by this stage in your life you have the most to lose and the most to protect. Indeed, recent statistics[ii] show one in five parents will be unable to work, or will die before retirement age.

This method not only offers a cost effective advantage, but can also make sure the proceeds are paid in the most effective way if, and when the time comes.

Contribution by Zurich Financial Services

[i]Australian Bureau of Statistics,Australian Social Trends, March 2009,

[ii] The Lifewise/NATSEM Underinsurance Report, Understanding the Social and Economic Impact of Underinsurance, 2010,


Important Information: The content of this publication are the opinions of the writer and is intended as general information only which does not take into account the personal investment objectives, financial situation or needs of any person. It is dated August 2015, is given in good faith and is derived from sources believed to be accurate as at this date, which may be subject to change. It should not be considered to be a comprehensive statement on any matter and should not be relied on as such. Neither Zurich Australia Limited ABN 92 000 010 195 AFSL 232510, nor Zurich Investment Management Limited ABN 56 063 278 400 AFSL 232511 of 5 Blue Street North Sydney NSW 2060, nor any of its related entities, employees or directors (Zurich) give any warranty of reliability or accuracy nor accept any responsibility arising in any way including by reason of negligence for errors and omissions. Zurich recommends investors seek advice from appropriately qualified financial advisers. Zurich and its related entities receive remuneration such as fees, charges and premiums for the financial products which they issue. Details of these payments can be found in the relevant fund Product Disclosure Statement. No part of this document may be reproduced without prior written permission from Zurich. CLYH-010413-2015