(Source: Australian Bureau of Statistics 2006)
Life insurance is paid as a lump sum to either a nominated beneficiary or your estate. The policy is paid out on either death or diagnosis of a terminal illness that will end in death within 12 months.
Policy is generally taken out to eliminate financial hardship after death of a spouse, especially if there is one or a main breadwinner. Proceeds can be used to pay out debts such as mortgage, pay for children’s education or invested for the family’s future needs. Cover can also be paid out to the new guardians of children in order to facilitate home extensions, education and ongoing costs of raising children.
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