There are many benefits to holding life insurance, and it is little surprise that the money paid out by a life policy is also commonly known as the ‘benefit’ amount.

Life Insurance Benefit – The amount you are covered for

The amount of money your life insurance covers is often known as the policy benefit amount.  The benefit is an amount chosen by you when you take out your policy and can vary greatly depending on your own circumstances.

The life insurance benefit paid to your family and loved ones will need to be sufficient to cover their needs, but mustn’t be so large that you cannot afford to maintain the policy premiums.  As with most types of insurance, a higher benefit amount will result in a higher premium.

The minimum and maximum benefit amounts do differ between insurers.  Generally the benefit amount can be within a range of $100,000 to $5,000,000, however for high-net-worth clients with significant life insurance needs there are a number of options for going higher than $5,000,000.

What are the Benefits of Life Insurance?

Aside from the amount you are covered for, when talking about life insurance benefits we can also be referring to the general benefits of holding life insurance.

Life insurance benefits include the peace of mind that comes with knowing that your family and loved ones will be looked after if something should happen to you and you are no longer able to look after them yourself.

The benefits to your family include the ability to repay your debts and mortgage, therefore taking away any financial worry that accompanies these liabilities.

Other benefits include the provision of ongoing funds to support your family.  A smaller life insurance policy may simply provide a financial buffer to your family, however a larger policy can provide a lump sum amount to be invested which can provide ongoing income for many years.

The benefit to you is knowing that your family is going to be looked after and not burdened by your death, and the benefit to your surviving family is that they can maintain a suitable standard of living and make their way through the grieving process without worrying about financial matters.

Life Insurance Benefits for Business

It’s not just Australian families that benefit from life insurance.  Many businesses and their owners have also enjoyed the benefits of having the right insurance package in place.

Life insurance can be used in a number of different business plans such as business succession planning, key person protection and buy-sell agreements.  Without life insurance benefits, many of these strategies would be far more difficult to implement.

My Life Insurance Benefits

The benefits you and your family receive from your life insurance cover depend on what you want the policy to achieve.

For some people it will be the peace of mind knowing that their family will have a small financial buffer if things went wrong, whilst for others it will be a deeper feeling of safety knowing that the financial future and security of their family will be assured regardless of what happens to them.