Life insurance can assist your family and dependents in covering vital expenses such as childcare and mortgage payments, if you are no longer here to help them.
Even if you’re certain of the value of this financial tool, you may be unsure of when to prioritise its acquisition. Here are three indicators that you should spend a bit of time shopping for insurance.
People depend on your income.
Whether it’s your partner, your children or people who work for you, having people in your life who rely on your income is a sure sign that you should consider life insurance.
Life insurance can help your family by providing money, known as a death benefit, if you die while covered by the policy.
There are two different types of life insurance you should be considering for this situation:
Term life insurance protects you for a set period of time, usually between 10 and 30 years. There is no coverage once the term expires, however this sort of life insurance is typically less expensive than a permanent policy.
Permanent life insurance is valid for the rest of your life and can build cash value, which produces interest and can be borrowed against for future costs.
One of the main distinctions between term and permanent life insurance is cost. Term insurance meets a temporary need and is inexpensive. Term insurance is designed to cover short-term conditions, such as having small children or covering a mortgage. Permanent life insurance is more expensive and is intended for those who desire to leave an inheritance to their children or to build wealth within the policy to use later in life.
You are a caregiver to someone:
Someone may rely on you for more than just a paycheck. If you care for a child (or anyone else) full-time, you should consider life insurance even if you don’t earn a living.
If something were to happen to you, you will no longer be able to provide care for that person, and that means someone else will have to care for them. There is cost to that.
If you are a stay-at-home parent or you are caring for an aging parent or relative, having life insurance will help pay your family’s bills if you pass away.
You have a mortgage:
A mortgage is a popular reason for getting life insurance. If you purchased your house with a partner, you’ll want to ensure that they’ll be able to continue making mortgage payments.
When determining how much life insurance you need, experts recommend taking your mortgage into account. While a death benefit of 10 times your annual income is a good starting point, your actual need may vary based on your mortgage.
If you have a mortgage or are purchasing a home, life insurance can allow your partner or spouse to continue living there even if you die.
Is life insurance for you?
Life insurance is a tool you can use to ensure that your family or partner is financially secure if you die. It is especially useful if you have substantial debts, such as a mortgage, or if you have individuals who rely on your income or work at home to make ends meet.
It can be a very useful as a life-long wealth building program for a child or grandchild. And of course, it is a unbeatable for transitioning wealth on to the next generation, or leaving a legacy to your favorite charity.
If you would like to explore your options for life insurance, please book a call: FREE 15-MINUTE CALL.
I wish health and happiness always!
With Gratitude,
Kevin-Barry Henry.
THIS ARTICLE IS PROVIDED AS A GENERAL SOURCE OF INFORMATION ONLY AND SHOULD NOT BE CONSIDERED TO BE PERSONAL INVESTMENT OR LEGAL ADVICE. READERS SHOULD CONSULT WITH THEIR FINANCIAL OR LEGAL ADVISOR TO ENSURE IT IS SUITABLE FOR THEIR CIRCUMSTANCES.