Signs that it’s time to get life cover
Life insurance is hardly something you think of when you’re young and single, but then you get married, become a parent, buy a home, and suddenly you start realising that there are people who would financially suffer if you died. So how exactly do certain life events affect your life cover insurance needs?
Events that will influence your life cover insurance needs
This is probably one of the biggest steps you’ll undertake in your adult life, as with it comes big financial responsibility. You now have mortgage payments that depend on you having a stable income. In the current economic climate, these payments are often rather expensive, and for this reason you’ll want to beef up your insurance to assist in covering those costs.
If you are married or living with a partner you get the benefit of a dual income. However, if you become reliant on it you will run into financial difficulty should your partner pass on. On top of that burial costs can get very expensive and often couples simply don’t have the necessary money at their disposal. If funeral costs, any relevant taxes, and estate associated expenses are taken into account, you can expect to fork out thousands. So this is why life cover, especially with a funeral cover included or a bolt on policy can be so vital.
Having and taking care of children is expensive. From clothing and food to general child care and schooling, your kids are of your biggest investments. If you passed on, this would leave your spouse solely financially responsible.
If you want to make sure that your family has everything they require and your kids are privy to all the opportunities you want them to have, the undertaking of life cover is a must.
Getting a new job
Starting a new job often comes with a lot of excitement, because for starters you are usually promised a bigger salary. This then means that your family may quickly become accustomed to and depend on the extra money coming in.
Another thing to keep in mind is if you were depending on a life cover policy through your previous employer, check if you are able to carry that policy over with you. You should also speak to your broker or advisor to adjust your cover in line with you income.
If you divorce, your ex will in all likelihood no longer have you listed as a beneficiary of their life insurance policy.
Further, if you are dependent on child support payments, it is advised that you stipulate as part of your divorce settlement that your ex undertake a life cover policy to cover the payments in the event of his/her death. Here, you should make sure that you are named as beneficiary.
When you retire you typically have fewer financial commitments and have potentially acquired a nice savings portfolio which could cover you in the event of your death.
This could be reason enough for you to decide to ditch your life cover policy, but it is vital to remember that your life insurance policy in fact has nothing to do with you and everything to do with those you leave behind.
It is not uncommon to at this age still have dependents who rely on you financially. From day to day living expenses to the upkeep of an estate or maybe you simply just want to leave something behind for the next generation, having a life cover policy could assist your loved ones with all of the above.
Of course, this decision is entirely up to you and dependent on your personal needs and situation, should you however find it a difficult one to make, you should look at consulting a trusted financial advisor.
Life if anything is messy and unpredictable, but that doesn’t mean you can’t be as prepared as possible for all its curveballs. Life insurance cover is one way to make sure of this.
Until next time,
The MoneyShop.co.za Team