What is Life Insurance?
Life insurance is a necessary evil!
When you think about it, you are paying for something (life insurance cover) that you hope you never cash in, and at the same time, you know that you will never get the premiums back that you paid for this cover.
Therefore why would you do it? The answer is PEACE OF MIND.
It gives you peace of mind that if an unforseen tragedy occurs, you know that at least you and your loved ones will be financially secure to the extent that you are prepared to cover yourself.
We all need to think of life insurances as a “gap filler” i.e. you have your life planned out, and all of a sudden an unforseen event occurs i.e. premature death, injury or illness that may disable you for the rest of your working life, or, you are temporarily disabled and unable to work for a period of time. You have debt/s, how do you replace this lost income? How do you service debt?
This insurance is then the financial “gap filler” specifically designed to meet your lifestyle needs whilst you are unable to generate an income or you are no longer around.
Why do I need this?
You need cover because if an unforeseen event was to occur that prevented you from working, either temporarily or permanently, or you died suddenly, the objective of this is that it will provide you and your family with the financial assistance to meet all the day to day living expenses. It won’t be you, as you will be either incapable of working or not with us anymore.
Life insurance provides financial assistance that you, or if you have a spouse/partner with or without children, will need if such an unforeseen event was to occur.
What happens if I don’t have Life Insurance?
If you don’t have the various life insurance covers that are available in place i.e. to protect and replace your income, to repay debt, to provide short-fall in lifestyle needs when such an event changes your whole life, you will be relying on your assets or others for assistance.
Without life insurance cover, your lifestyle needs will be funded firstly from savings then, depending on the degree of the tragic event, it would be your assets. Therefore, you need to consider “what assets do I have that can replace the loss of future earnings and repay debt”? Once I have sold these assets, will my family be able to maintain their lifestyle as I won’t be here anymore?
Once these assets have all been sold, where will the assistance come from? The next likely source would be Government assistance, disability allowance, unemployment benefits? Do you want your family to live like this? That is the question you need to ask yourself. And then you need to ask, what is the price that I need to pay to ensure that this does not happen and how can I best do this so that it is funded in the most cost and tax efficient manner?
What will this cost me?
If you do not have the various life insurance covers in place to replace your income, repay debts and pay for future needs, you will not have the peace of mind that you have provided for yourself and your family if an unforeseen event was to occur.
Who can really place a cost on that peace of mind knowing that you and your family will be financially ok if you have appropriate life insurances in place?
The monetary cost, depending on your needs, can be on average between 1% – 3% of your gross income.
This cost can be paid in a variety of ways. Some covers can be either directly, or indirectly, tax deductible. It can be cost efficient if it is paid from appropriate sources.
You need to determine what is the cost that you are prepared to pay for your peace of mind. Then talk to us, we will provide you with appropriate costings and show you how this can be funded in the most cost and tax efficient manner without it effecting your personal lifestyle budget.
Your next step is to get a quote.