The decision making process when it comes to evaluating whether or not you need life insurance can be quite complicated and cumbersome. There are many different factors to consider when determining whether or not your family needs the financial security that life insurance offers.
Determining how much insurance you and your family needs is something that is best advised by your insurance adviser. Identifying the need for life insurance is something that is relatively straightforward and is something that we must all take upon ourselves to ensure that our family is recieving the advice and cover it deserves.
There are a number of fundamental determining factors that indicate whether or not your family stands to gain by having the peace of mind that life insurance can provide. They include but aren’t limited to:
Will your family need your income to be replaced if you were no longer here?
If you are the main breadwinner in your family then it is highly unlikely that your family would be able to cope with the financial burden placed on it should you not continue to provide for them. The lump sum that is received from life insurance can be used to offset this financial burden over the course of your families life.
Do you have a mortgage or other debts?
Extinguishing your debts will enable your estate to be distributed to your family debt free. Often this allows for your families cost of living to be drastically decreased. As a result, they are able to live their lives without a cumbersome debt obligation.
Is Life Insurance still neccessary even if you dont earn an income?
There are many different costs associated with a spouse or parent passing away, even if they don’t earn an income. Typically, households that have a parent or spouse who dont have an income are reliant on them to perform duties around the house. The passing of a non-working spouse often results in the need to employ a carer or minder for the childrent in the family.
General Advice Disclaimer
General advice warning: The advice provided is general advice only and in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.