Do you need life insurance?
Not everyone needs life insurance . But if your children, partner or other relatives depend on your income to cover the mortgage or other living expenses, then the answer is yes – you probably do want life insurance, since it will help provide for your family in the event of your death.
What is life insurance?
Life insurance can pay your dependants a lump sum or regular payments if you die.
What isn’t covered by life insurance
Life insurance only covers death – if you can’t provide for your family because of illness or disability, you won’t be covered.
Most policies have some exclusions (things they don’t cover). For example, they may not pay out if you die due to drug or alcohol abuse, and you normally have to pay extra to be covered when you take part in risky sports.
And if you have a serious health problem when you take out the policy, your insurance may exclude any cause of death related to that illness.
You can buy policies which include other types of cover such as total and permanent disability and critical illness cover.
Do you need life insurance
If you have dependants – such as school age children, a partner who relies on your income or a family living in a house with a mortgage that you pay – a life insurance policy can provide for them if you die.
You can’t rely on the government to take care of your family – the money they would get from the state is much lower than you’d probably expect. If you want to provide for your family financially if you die, life insurance is a must.
Who doesn’t need life insurance?
If you are single with no debts and are not about to get serious with your partner or having children. It is good to get insurance when you young and healthy.
If you’re young – or even not so young but still healthy – life insurance is very good value.
Often just a few dollars a day is all you need to provide your loved ones with plenty of financial protection.
Other types of insurance to consider
Life insurance covers the worst-case scenario, but it’s also important to consider how you might pay your bills or your mortgage if you couldn’t work because of illness or injury.
Critical illness insurance pays out a lump sum or a regular payment, helping you cover a mortgage or other expenses, if you suffer from one of the illnesses or injuries specified on your policy.
Income protection insurance covers a wider range of illness and disability, and gives regular payments until you recover enough to return to work, retire or reach the end of the policy payment term.
You can get critical illness cover as a stand-alone policy or as an add-on to life cover.
Total and Permanent Disability covers the situation where you are unable to work due to illness and injury. You are unable to ever perform the duties to which you have been educated or trained.