Many people see life insurance as an unnecessary expense but contrary to what you might think, life insurance is surprisingly affordable (get a free quote) and an important financial decision. The cost is generally not much more than the insurance on your phone. Except rather than protecting your phone, you’re protecting your family against unpayable debt, financial hardship and loss of income. Life insurance can often be advantageous but there are several situations where it’s usually essential:
- – You have children or dependents
- – Your death would cause a financial strain on your family or those close to you
- – You have debts
- – You have a business (particularly a partnership)
Life Insurance for Your Family
If something were to happen to you, what sort of strain would that place on your family? Would the loss of your income make paying bills, rent or maintaining a car difficult? If your family would struggle without you, it’s important you take out life insurance. You and your family will not have to worry about the financial strains they could have faced.
For You Debts
If you have debts life insurance is a must. Think about whether your family would be capable of paying of your debts whilst maintaining their lifestyle if you could no longer provide income. Would they lose their home, or their car? Even if they sell the house, this does not guarantee it will cover the entirety of the loan. Life insurance will guarantee they have a helping hand if something happens to you and won’t be burdened by unpayable debt.
For Your Business
Life insurance is important for business owners, particularly with employees or partnerships. Known as ‘business succession planning’, figuring out what would happen in the case of your or a partners death , injury or illness is essential in maintaining the business and your family’s wealth. For example, say your partner passes away and you have an agreement to buy out the deceased partners share, you will need the funds to do this (preparing a legal agreement in this situation is essential). Life insurance (as well as insurance for injury or illness) is usually the best solution, particularly if the business already has debts.
You can also look at this from your family’s perspective. If something were to happen to you and your family needed to sell your share in the business (perhaps to continue paying off a mortgage), a life insurance policy through the business ensures that your partner(s) will have the immediate funds to buy your share, pay any employees, and continue running the business.
To find out more about life insurance for yourself, your family or your business, contact us.
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.