Why life insurance cover needs to change as you grow

Sometimes we don’t think about our life insurance needs until it’s too late. Changing circumstances, rises or falls in income and whether or not the kids are still at home all affect the amount of cover we need. Here we examine why you should consider adapting life insurance cover for all life stages.

Just starting out: Kicking off a career and saving money for your life goals

So you’ve left school, completed a degree and started out in your career. You mightn’t be thinking about life insurance at this stage of your life, but getting on the ladder is something you definitely need to consider.

As you’re starting out, you might be thinking more about saving for a home, getting some savings under your belt and enjoying life. But life insurance cover, also known as death and total and permanent disablement (TPD), will see you on the way to preparing for the rest of your life.

When you’re starting out with life insurance, you need to think about the premiums you might want to pay. Premiums generally increase as you get older, so you’ll need to think ahead and make sure you can cater for any premium increase. You can learn about the cost of death and TPD cover in our Insurance guide.

The prime years

You’ve got a home (and probably a mortgage), as well as kids and all the costs that come with them, including school and medical fees. When you consider your cover at this stage of your life, it’s likely that the bare minimum you will aim to cover is the debt on your primary residence. The last thing you want is to leave your family without a roof over their heads.

But you should consider other outgoings – school fees, car payments and so on. And if you’re the primary wage earner and your partner is the primary carer, you may want enough cover so the children can be looked after until they’re old enough to fend for themselves.

Summary: The bare minimum you want is to cover the debt on your primary residence. But you will also want to consider the outgoings – school fees, car payments and so on.

The golden years

The kids have left home, your house is paid off and you may have investments or be considering retirement. It’s at this stage that you might think about dialling back your cover, as long as your partner is taken care of in the event something happens to you. In the golden years, including retirement, you may have enough income to live off and for your partner to survive on. But you should check your income and investments carefully to ensure there’s going to be enough for someone to cover their expenses and have a healthy lifestyle.

Are you in the right occupation rating?

Your occupation rating determines how much you pay for your cover. We offer three occupation ratings:

• Active – for workers in non-office based environments, such as teachers and nurses, or trade environments, such as mechanics, builders, and tradespeople.
• Office – for office workers, such as public servants, administrators, and secretaries.
• Professional – for high-income white-collar professionals, such as lawyers, CEOs and academics.

By default, all members start in the Active rating. However, if eligible, you can apply to switch ratings and save on insurance fees.

What’s my occupation rating?

To find out your occupation rating, log in to Member Online.

To find out if you’re eligible to switch occupation ratings, see our Insurance guide at spiritsuper.com.au/forms.

Changing life events call for changing insurance cover

Life insurance changes as we move through different life stages. It always pays to talk to a financial adviser about your current life stage and the cover you may need.

Find out more about insurance through super.

Article supplied by MetLife Australia, our insurance partner.

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