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Friday 12 June 2015
Friday 12 June 2015
Friday 12 June 2015
Friday 12 June 2015
No one needs life insurance – after all, as the old saying goes, “you can’t take it with you.” Once you’re gone, money is no longer your concern. However, having life cover could make a world of difference to your loved ones. In the short term, it can reduce the risk of grief being compounded by financial anxiety. Over the long term, it could improve their quality of life in your absence.
Let’s answer some key questions about life insurance.
Why Take Out Life Insurance?
There are essentially two reasons to take out life insurance:
Because you have to: Certain loans, such as mortgages, require life cover as a condition of the agreement.
Because you want to: To ensure your loved ones are protected financially if you pass away.
Life insurance provides peace of mind that the people who rely on you will have the financial support they need during an extremely difficult time.
How Much Is My Life Worth?
You are unique and irreplaceable, but many of the tasks you perform daily – whether as a breadwinner or a home-maker – are not. If you pass away:
Someone will need to earn the income you provided.
Someone will need to perform the tasks you managed (e.g., childcare, cleaning, or care-giving).
These services often come at a financial cost. Even if you don’t bring in an income, your life has significant financial value to those who depend on you. It’s important to calculate what impact your absence would have on your family’s finances.
Do I Need Life Insurance If I Have Savings and a Will?
Having savings and a will is a great start, but life insurance still provides key benefits:
Are Your Savings Enough?
Life insurance gives you an opportunity to check whether your savings would adequately protect your family in your absence.Avoid Probate Delays
Life insurance payouts can often be excluded from the probate process. This means your beneficiaries could receive funds quickly – sometimes well before probate is complete.
This quick access to money can make a huge difference, helping your family handle immediate financial needs without additional stress.
What If I Can’t Afford Life Insurance Premiums?
If your financial plan doesn’t leave room for life insurance premiums, there are two solutions:
1. Review Your Budget
Take a closer look at your financial plan and see where adjustments can be made to free up cash for premiums.
2. Lower Your Premiums
Premiums are based on the statistical likelihood of you passing away during the policy term. While you can’t control your age, you can control certain factors:
Lifestyle Changes: If you’re a smoker, quitting can reduce premiums and free up cash to pay for cover.
Type of Cover: Choose a policy that meets your needs:
If the goal is to pay off a mortgage, consider a policy where the payout decreases over time as your mortgage debt reduces. This type of cover is usually more affordable.
Final Thoughts
While life insurance may not seem essential, it provides financial security and peace of mind for your loved ones in your absence. Whether you’re protecting income, covering childcare costs, or ensuring debts are paid, the right life insurance policy can make all the difference.
If you’re concerned about affordability, speak with a financial adviser who can help you explore your options and find cover that fits your needs and budget.
No one needs life insurance – after all, as the old saying goes, “you can’t take it with you.” Once you’re gone, money is no longer your concern. However, having life cover could make a world of difference to your loved ones. In the short term, it can reduce the risk of grief being compounded by financial anxiety. Over the long term, it could improve their quality of life in your absence.
Let’s answer some key questions about life insurance.
Why Take Out Life Insurance?
There are essentially two reasons to take out life insurance:
Because you have to: Certain loans, such as mortgages, require life cover as a condition of the agreement.
Because you want to: To ensure your loved ones are protected financially if you pass away.
Life insurance provides peace of mind that the people who rely on you will have the financial support they need during an extremely difficult time.
How Much Is My Life Worth?
You are unique and irreplaceable, but many of the tasks you perform daily – whether as a breadwinner or a home-maker – are not. If you pass away:
Someone will need to earn the income you provided.
Someone will need to perform the tasks you managed (e.g., childcare, cleaning, or care-giving).
These services often come at a financial cost. Even if you don’t bring in an income, your life has significant financial value to those who depend on you. It’s important to calculate what impact your absence would have on your family’s finances.
Do I Need Life Insurance If I Have Savings and a Will?
Having savings and a will is a great start, but life insurance still provides key benefits:
Are Your Savings Enough?
Life insurance gives you an opportunity to check whether your savings would adequately protect your family in your absence.Avoid Probate Delays
Life insurance payouts can often be excluded from the probate process. This means your beneficiaries could receive funds quickly – sometimes well before probate is complete.
This quick access to money can make a huge difference, helping your family handle immediate financial needs without additional stress.
What If I Can’t Afford Life Insurance Premiums?
If your financial plan doesn’t leave room for life insurance premiums, there are two solutions:
1. Review Your Budget
Take a closer look at your financial plan and see where adjustments can be made to free up cash for premiums.
2. Lower Your Premiums
Premiums are based on the statistical likelihood of you passing away during the policy term. While you can’t control your age, you can control certain factors:
Lifestyle Changes: If you’re a smoker, quitting can reduce premiums and free up cash to pay for cover.
Type of Cover: Choose a policy that meets your needs:
If the goal is to pay off a mortgage, consider a policy where the payout decreases over time as your mortgage debt reduces. This type of cover is usually more affordable.
Final Thoughts
While life insurance may not seem essential, it provides financial security and peace of mind for your loved ones in your absence. Whether you’re protecting income, covering childcare costs, or ensuring debts are paid, the right life insurance policy can make all the difference.
If you’re concerned about affordability, speak with a financial adviser who can help you explore your options and find cover that fits your needs and budget.
