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Life Insurance

Life Insurance provides a lump sum payment to a nominated beneficiary or beneficiaries on the death of a life insured. The lump sum paid out is usually used first and foremost to clear any debt the insured may have left behind. Once the debt is cleared, any additional amounts left over may be used to fund children's education as well as assisting in maintaining the beneficiaries lifestyle. Lump sums paid on death also give the beneficiaries cash flow without necessarily having to sell assets or rely on family support to clear debt or maintain a lifestyle.

Any lump sum paid on death of an indivdual is paid to the beneficiaries tax free.

Life Insurance may be taken out through superannuation or by an individual in his/her own name. Should one choose to take the policy through superannuation, there may be tax advantages in that the premium may be tax deductible. However, one must also be aware that it forms part of the individual's superannuation contributions which are limited on an annual basis.

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