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Tips for Protecting Your Family's Future & Home

How are your finances post-pandemic?

Here are some suggestions you can focus on to bring more confidence back to your financial life

01
Rebuild your Emergency Savings Fund

If your home deposit or your pandemic response came from your savings, you may need additional protection while building them back up, so check your Income Protection insurance has a low claim waiting period.

02
Mortgage repayments are just the beginning of a spending budget

Be sure to plan ahead for repeating expenses such as council land rates & strata fees, utilities, and maintenance costs.

03
Lenders shy away from credit histories showing Pay-Day-Loans at refinance time

Should you ever need to refinance, banks consider a history of pay-day loans or credit card cash advances as a negative; so try not to use them in the 6 months before an application to refinance a mortgage.

04
If you can make additional loan repayments, do so

Most modern mortgages allow for additional repayments and many have an Offset Account so be sure to learn about these.

05

Have a goal of getting 3 months ahead in mortgage and loan repayments, then extend that to 6 months

Nothing feels as safe as being ahead in mortgage and debt repayments.


partner holding the hand of their wife and child who are standing on an overhead suspension bridge looking at the beautiful scenery below them

What is Life insurance?

There's a lot of information out there about life insurance, but you don't need to understand all of it to get started.

The basic premise is simple:

Life insurance gives you peace of mind while you're alive, and financial support for your loved ones when you're gone.

  • It's something you should have if there are people in your life depending on you for everyday living expenses, rent or mortgage repayments, education tuition costs, or retirement income.
  • It's something you should have if there are people in your life you love and care for and want to support financially or emotionally; like gifting a deposit for a first home, paying out student debts, helping with a medical procedure or supporting an additional needs friend or even a charity whose beliefs match your own.
  • It's something you should have if you have borrowed money from others, if you have joint debts on joint assets (like a home) or if you need to equalise the value of your estate comprised of 'lumpy assets' between multiple beneficiaries (estate planning and inheritance) or if you want to leave a financial legacy, inheritance or provisions for someone you love.

When someone is dependent upon another person being alive or in good health, it makes sense to insure against that person dying or being incapacitated.

Learning to Protect and Provide – its the most noble of human traits

Protecting and providing is one of humanities most desirable traits

The idea behind Life insurance is, during your life you will probably support people you love, you will choose your family and friends and maybe support a cause, or a charity or two as well. Don’t let all this good not happen, just in case you’re not here to do it. 

  • Life insurance can make a huge difference for you and your family, not just financially but emotionally, too. And purchasing a policy sooner, rather than later, will give you more options and flexibility, and improve your future financial security.
  • What many people don't know is Life insurance also pays out upon a Terminal Illness diagnosis, making it relevant for you today, and later.

The good news about Life insurance is if you need it, you probably have something of value to protect – a family, a loved one, and the ability to continue to earn an income.

So you could say that Life insurance is the price we all pay for our prosperity.

What Life insurance does

Life insurance gives your nominated beneficiary a lump sum payment when you pass away or pays you if you’re diagnosed with a terminal illness.

  • In general, early in life, most people have large debts and financial responsibilities, but a low level of salable assets to support them if they get sick or injured, disabled, or even unexpectedly pass away.
  • Later in life, most people have lower debts and financial responsibilities, but a higher increase in health risks to protect against, if they get sick or injured, disabled, or even unexpectedly pass away.

Why Life insurance is different for everyone

  • Everyone faces different types and levels of risk in life in combination with their age and type of occupation – so the right solutions are different for everyone.
  • Different levels of risks grow out of our particular types of jobs, the current state of health and pastimes – like weekend hobbies and club sports, and even your family health history.

Having the right amount of insurance in place is not a goal in itself

It's about supporting our very human trait to protect and provide.  It's what makes us human and makes life love and business worth pursuing.

  • It's not about owning a financial product, rather it's the way a person's goals can be achieved and loved ones can be provided for (and business debts managed) in the event we're no longer around to care for them.
  • Planning ahead just in case, is an important life skill.  Financial 'preparing' (not just financial planning) is a learned life skill we all need to work on. Preparing for a future is the way we all navigate through our ever-increasing complex lives.

Having sufficient Life insurance is making sure that you and your family have a place to live, your children can complete their education and your partner can continue to live in the location where they are most supported.

And how much insurance is enough for you, really depends upon how much living you have to do.

Watch our Explainer Video: How Much Life Insurance is Enough?

Not sure Life insurance is what you need at the moment?

When you start thinking about getting your life insurances sorted, odds are you're thinking about protecting your family, (biological or logical) both now and in the future. And that's a great place to start.

But your unexpected death or terminal illness may not be the first thing on your mind.

Modern life and business both carry the innate statistical risks of life – we call The Numbers of Life – that need to be considered and managed.

The 4 Statical risks of life we all face

The reason we say these 4 risks are faced by everyone is because they are statical realities. This means they aren't personal – they're statical – and therefore cannot be avoided just managed. And that's where Sapience Financial can help you do that.

The Numbers of Life | The Statistical Risks of Life we all face


Crisis and Trauma insurance Crisis & Trauma
We all have a 1 in 3 chance of suffering a critical medical trauma or significant illness during our working life.

Income Protection insurance Income Protection
We all have a 1 in 4 chance of being sick or injured and unable to work for at least 3 months during our working life.

Life and Terminal Illness insurance Life & Terminal Illness
We all have a 1 in 10 chance of unexpectedly passing away during our working life.

Total and Permanent Disability insurance Total & Permanent Disability (TPD)
We all have a 1 in 20 chance of being disabled long term with a total and permanent disability.

Source: Life Underwriting Guidelines

Frequently Asked Questions about Life & Terminal Illness insurance


How much cover do I need?

It depends on where you are in your life and who depends on you financially. To start with, work out how much life insurance you need by calculating your long-term financial obligations and then subtracting your salable assets. The remainder is one of the gaps life insurance can fill.

  • When you're starting a family, you probably also want to have enough to replace your income, so your spouse or partner and children have the support they need.
  • You will want to have a stable place to live – hopefully debt free soon.
  • Later in life, when your kids are grown and your house is paid for, you may want to reassess the amount of life insurance you have and focus on final expenses, outstanding debt, and the legacy you would like to leave your loved ones.
  • If you're a Business, a Sole trader, a Partnership or running a Company structure, you will want to have a deeper conversation about Family risks and Business risks, and how to keep them apart.

Learn more at the government's MoneySmart website life insurance calculator here.

Is Life insurance worth it?

For just cents on the dollar, life insurance can provide immediate financial protection that is hard to match in any other way. This benefit will allow families, and even businesses, to more easily cope with the financial challenges that often result from an unexpected death or terminal illness. Life insurance provides an immediate inheritance even if you're yet to amass your wealth.

What if my Super fund already provides life insurance?

The default level of Life insurance cover provided by most super funds is simply nowhere near enough for the average fund member's needs and does not take into account their individual needs, financial goals, decisions and responsibilities. These group insurance policies are prone to run away price increases and the insurance providers can be changed by the Super Trustee without needing your consent. Default levels of Life insurance in Super do not meet the needs of most fund members and at worst create a false sense of security and low-level anxiety.

Can my Super fund pay the insurance premiums for my Life insurance policy?

External Life Insurance premiums can be paid from a superannuation fund once a year by an automatic rollover, as directed by the super fund member. Talk with us to see if this is a situation that is relevant to your situation.

How we can help

Life and Terminal Illness insurance is the cornerstone of protecting yourself, your family and your business from those risks in life that are too traumatic and expensive to personally carry.

Contact us for a confidential chat about your needs.


Related: Types of Personal Insurance products we work with

Different types of risk protection insurances, provide protection for different life risks.

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