Do I Really Need Life Insurance?
A heart to heart chat about protecting the people you love.
Thinking about Life Insurance but not sure if it’s worth it? Perth Financial Planner Tim Grapiglia cuts through the jargon, funeral costs, debt, tax quirks and claim stats so you can decide with confidence.
1. What exactly is Life Insurance?
Life Insurance is a once off, lump sum payment to your beneficiary if you die or are diagnosed with a terminal illness. Imagine it as a financial parachute that floats down to catch your family when you’re not there to swipe the card. First, you pick a cover amount, enough to clear the mortgage, cover day to day bills, maybe fund university, school and fees. After that, you choose whether to hold it inside super or pay for it personally. Easy, right?
2. “You won’t believe this, but…” funerals aren’t cheap
Even a modest Aussie farewell costs between $4,000 and $15,000, with the national average siting around $8,745.
Can you imagine your partner hunting for that cash while also choosing flowers and writing eulogies? No thanks.
Then imagine the next challenge of paying that home loan and sending the kids to school.
3. Why it matters for families and singles
For families
Kids still need Vegemite sandwiches, football boots and somewhere to sleep. A Life Insurance payout stops grief from turning into a financial crisis.
For singles
No dependants? Cool. But who’ll wipe your debts, pay the rent advance or cover mum’s flight home when the worst happens? A small policy can spare loved ones a giant bill, and give you control over who gets what.
4. The odds: under-insurance is real
Default cover inside super meets only ~20–25 % of a basic family’s needs.
The latest APRA data shows death claim admittance rates of up to 98 % for group policies, so insurers do pay.
Insurance Business America
Short version? Most Aussies are under-covered, but claims generally succeed when disaster strikes.
5. Quick story time
I once had a client, let’s call him Dave, that I helped with investment advice but refused to discuss Life Insurance because he swore it was for “old blokes with yachts.” Then, at 38, a sudden cardiac event took him. The tiny default policy in his super barely covered funeral costs; his partner still had a $480k mortgage and two preschoolers. I felt the gut-punch up close: the grief was huge, the financial stress worse. I promised myself I’d never let clients be “another Dave.”
6. Cost vs value (spoiler: cheaper than you think)
A 35 year old non smoker can snag $500 k cover for roughly $21 a month—that’s 70 c a day, AKA half a takeaway flat white.
NobleOak Life Insurance
Finder puts the average 2024 premium at $108 a month, but that’s across ages, smokers, higher sums and so on. finder.com.au
Bottom line: even a modest policy delivers life-changing money for pocket-change prices.
7. Inside vs outside super (keep it simple)
| Option | Premiums tax-deductible? | Who gets the cash fastest? | Gotchas |
|---|---|---|---|
| Inside super | Deductible to the fund, but you don’t claim it. | Paid via the super fund’s trustee – can delay things. | Adult kids may pay up to 32% tax on the payout. |
| Outside super | Not tax-deductible for death cover. | Goes straight to your named beneficiary, no trustee hoops. | Premiums come from after-tax dollars. |
Pick the structure that balances speed, tax and cash flow.
8. Myth-busting (and a chuckle)
| Myth | Reality |
|---|---|
| “I’m young, it can wait.” | Accidents & sudden illness don’t ask for ID. |
| “Super cover is enough.” | Odds are it covers barely one-third of what your family needs. |
| “Insurers never pay.” | APRA’s latest figures show 97–99% of advised death claims get paid. |
Trying to self-insure a mortgage on grieving day one? That’s like building an umbrella during a downpour, it can get messy.
9. Simple 3 step game plan
Do the maths. Add up debts, future school fees, everyday living costs.
Chat to a planner. We’ll tailor cover amount, ownership and beneficiary nominations.
Review yearly. New baby? Bigger loan? Time to tweak.
After that, exhale. Peace of mind unlocked.
10. Thought provoking questions before we wrap
Could your partner keep the family home on one income?
Who’d clear your credit-card balance tomorrow?
What legacy do you really want to leave?
Ready to sort it?
If a 70 cent per day safety net sounds fair, let’s talk.
Book a free 15-minute call and see whether Life Insurance (or a broader protection plan) fits your world.
General advice only; consider your circumstances before acting.
Written by Tim at EvolvU.
Insurance made simple.
Protection made personal.
Looking into Life Insurance and wondering about income Protection too?
Check out: Do I Really Need Income Protection?