What is life insurance?
A life insurance policy provides financial assistance in the form of a lump sum to your family or other dependents in the event of your death. It is generally available to people aged between 17 and 69 and can usually be renewed until the policy anniversary date before their 99th birthday. The proceeds can be used to meet your family’s outstanding commitments, such as:
- Children’s education costs
- Mortgage and other loan repayments
- Enabling the life insured’s business to keep running
- Meeting the family’s ongoing income needs
A price can never be put on the value of a human life, however life insurance can be used to provide a safety net that allows your family to cope financially if you or your partner died. In what would be an emotionally devastating time, life insurance removes one major stress – financial insecurity.
This type of policy has no savings or investment component – it is only a means of managing risk.
How much life insurance cover do I need?
Ensuring you have adequate life insurance for your individual circumstances can be a difficult task. A financial planner can help you by highlighting areas to consider when calculating the amount of life insurance that you require.
There is an old saying ‘A debt should not out last the person who created it‘. So add up all you current debts to one figure and this is our starting point. From here, depending on individual circumstances we might add in education cost of children, funeral costs and accrued medical expenses. Last but not least, take into account an estimate of the future income requirements of your family.
There is no set amount of Life insurance everyone should have, the amount you may need is calculated based on a number of factors, like your:
- income – how much you earn today (and tomorrow!)
- dependants – do you have children or other financial dependants?
- debts – do you have a mortgage, loan or other debts?
- assets – have you accumulated any assets over the years, like property or shares?
To understand your needs, your financial adviser will ask you some questions, so it’s time to start thinking about the future (go on, it’s fun!).
What does the future look like for you and your family?
Do you have plans to put your children through university, take holidays or buy an investment property?
How much does your family’s lifestyle cost you each month – bills, mortgage payments, kids activities?
If you would like further information on the products we offer or would like a quote on Life Insurance please contact us.