Preparing for a Child’s Future as a Single Mum
Real Insurance | 16 July 2015
…a life insurance policy could mean the difference between your
children struggling to make ends meet or being financially secure…
Being a parent is a 24/7 challenge. But, being a single parent, well it’s even more so! Your children really depend on you. Having support from family and friends is vital, but ultimately you’re responsible for putting in place measures to secure your children’s future if something were to happen to you.
Facing these facts can be overwhelming and hard to stomach. But, it needn’t be that way!
We’ve created some simple steps below to help you insure your children’s financial future so that you can focus on more important things, like spending quality time with the people that count in your life.
Take out a life insurance policy
Insure your greatest asset – your ability to work
Make a will
There are different types of life insurance policies available in Australia. These include: Term Life Cover for Death; Total and Permanent Disability Insurance; Accidental Death and Serious Injury; and Income Protection Coverage for when you are unable to work because of illness or injury.
Being able to claim on a life insurance policy could mean the difference between your children struggling to make ends meet or being financially secure.
Many life insurance policies can be modified according to your needs and budget – for example some companies allow you to choose to pay your premium on a monthly or fortnightly basis, a real benefit when you’re on a single income.
When working how much life insurance cover you’ll need, you should as a minimum add up any debts that will need repaying, add to this how much your children would need to maintain their lifestyle and consider how long that income would need to last. Think about any of your assets that could be sold too, as this might reduce the amount of cover you need. Of course this is just a rough guide, and you should consider obtaining advice, especially if your circumstances are out of the ordinary.
With Family Life Cover from Real Insurance you can choose the benefit amount that you want your children to receive. It will be paid to them as a lump sum cash payment (from $100,000 up to $1 million) in increments of $50,000.Your children can then use the money to help keep their life on track – education costs, mortgage repayments, car loan repayments or daily living expenses.
Even if you have life insurance through your superannuation, Family Life Cover from Real Insurance can help boost your insurance coverage so that your family is not left short of money.
Best of all when you take out a policy with Real Insurance, 10 per cent of your premiums that are paid in the first 12 months will be refunded with ‘The Real Reward’ and; as long as your premiums are paid on time, Real Insurance guarantees to renew your coverage, despite changes to your age, health and lifestyle.
A great online tool that can help you calculate how much cover you will need is the Real Insurance Life Insurance Calculator.
We all rely on our incomes to pay the bills and look after our families. So, if you became sick or injured and couldn’t work, the question is: how would you support yourself and your family while you recovered?
Income protection insurance replaces the income that you have lost through your inability to work due to sickness or injury. It’s especially important for those who are self-employed, small business owners or professionals who rely on their ability to work.
It pays a monthly benefit, so you can focus on getting better without worrying about your finances. This can be a load off your mind when you have household bills piling up!
At Real Insurance, Income Protection Insurance premiums can be paid on the day of your choice, either fortnightly, monthly or annually. And, if you have to make a claim, the money can be used in any way that you wish – to cover daily living expenses, rent, mortgage, credit card bills, car repayments, or even a holiday!
You can increase or decrease your insurance premiums at any time, but any change is subject to approval.
Okay, It’s not on my top priority list of things I want to do, and it may seem downright depressing or tiresome. But, a will is a legal document that helps you to provide for the people that you care about after you die. You can leave particular items to certain people and appoint a person to carry out your instructions in your will (an executor).
If you die without a will in Australia, you will have no say as to how your estate is distributed and it will be disseminated to your relatives according to a legal formula (‘intestacy rules’).
Ensure that your will is properly made – either by a solicitor, the NSW Trustee and Guardian or a trustee company. Such a professional can consider tax issues that you’ll need to attend to when drafting your will.
There is no set fee to create a will, as solicitors’ fees can vary, depending on the complexity of your will. Therefore, it’s recommended that you shop around to compare what solicitors charge.
If you want peace of mind about your children’s future as a single mum, taking these simple steps can make a real difference.
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