Life Insurance
Why Life Insurance?
It’s safe to say that nobody wants to give the matter a great deal of thought, but there is something very reassuring about knowing that if the worst should happen to you, your family and loved ones would be financially secure.
The problem is, the longer you put off assessing your life insurance needs, the greater the cost is likely to be.
At its heart, life insurance is simply designed to provide financial stability for the families and loved ones of those who have died, to protect them from financial hardship and debt.
People of all ages take out life insurance and it’s not just your age, but your individual circumstances and what stage of life you are in that dictates your life insurance needs.
Below you can find a basic outline of some of the different life stages and the main role life insurance plays in them.
Young single person
- Looking to protect their financial dependents from debt due to loans etc.
Young couple
- Protect against mortgage debt
- Protect against personal debt as well as credit cards
- About to start a family or have young children
- Plan to send the children to university
Mature couple
- Increasing your debt to purchase an investment portfolio or rental property
- Have physically or financially dependent parent/s
- Want to leave an inheritance for children or grandchildren
Factors Affecting Cost
There are many factors that can affect the premium you will pay when taking out a life insurance policy. As you would expect, the higher the level of cover you require the higher your premium will be. Therefore, you need to balance the level of cover you implement with the impact on your pocket.
Shorter term policies cost less, for example, if you are taking a policy in order to protect your children financially than you would likely implement the policy until the children are no longer financially dependent on you or your partner. Life insurance policies are based on risk; the provider looks at you as an individual and calculates the risk for them to insure you. Therefore, things like age, weight, whether you smoke or not and your medical history can all have an impact on the cost. Taking a policy out earlier in life can be beneficial on your pocket especially if it is a level term policy, as this ensures you get the benefit of a lower premium as you get older.
How Much Cover?
The cover you take out should be adequate to meet your current needs. To calculate this, as an example you can look at the level of debt you currently have as one figure. If you have a family or financial dependents you could also calculate how much money would be needed to support them until they are no longer financially dependent. Add these figures together and it will give you an indication of the level of cover you need.
Some employers provide a life policy of 1-3X annual salary; however, this is rarely enough, especially when a family is taken into consideration.
Many people will look to take out additional personal life insurance to make up the shortfall between the cover they need and what their employer provides.
You can take out life insurance for up to 10 years via the link below completely online, with no medical underwriting up to $500,000 and receive your policy documents in 10 minutes! Coverage over this amount would require additional information.
DISCLAIMER
We may receive revenue on member-generated activity which maintains the quality and diversity of our services, hence further benefiting members. All costs incurred in marketing specific member benefits programs are borne by the member benefits partners.
