Family finances:

What does it take to have a family financial plan? According to the publisher of lifeinsurancefinder.com.au, Fred Schebesta - quite a lot.

Research conducted for his online site found that one-third of Australians haven’t thought about putting together a family financial plan, and half say it would take the death of a family member or close friend to even think about it.

Other than that, more Australians are likely to take out life insurance when they take out a mortgage than on the birth of their first child (36% compared with 23%).

“Unfortunately, it appears as though for many of us, it takes a dreadful cautionary tale or turn of events before we realise how important it really is to protect our family,” Mr Schebesta said.

A family financial plan can take account of property, superannuation, income owed if in a salaried position, shares and other investments and income protection or life insurance.

He suggests the following key times to consider a family financial plan.

1.  Getting married: Responsibilities change when married or in a partnership. Make sure a spouse or partner is provided for.

2.  Having children:  Children cost money for at least 18 years, so your financial plan should take into account what the expenses are for dependant children in terms of food, clothes and education as a minimum. As the family increases, review the plan.

3.  New home or mortgage:A first home purchase is often the biggest financial commitment in relative terms in one’s lifetime. It is crucial to ensure the right cover is in place for the circumstances.

4.  But I’m single with no kids:So who would pay any debt accumulated? The funeral expenses? It may also be worth considering insurance in case work ceases because of serious illness or injury.

5.  The earlier the better:There are more competitive premiums on life insurance the younger it is taken account. Life insurers also assess an applicant’s health so it helps to be in good health before arranging cover – not leave it until there is an illness or injury.

“Taking the time to compare the different options available and weeding out unnecessary and expensive extras can save thousands of dollars in ensuring there is adequate protection. Death, serious illness and injury can be sudden and unexpected and people shouldn’t wait until it’s too late before they consider the value of a family financial plan.”