If you are wondering whether or not you need life insurance, there are a number of factors you must consider. Continue reading to find out what they are.
Whether you are starting a family or nearing retirement age, life insurance should be a fundamental component of the financial planning process. With relatively cost-effective monthly plans available, it can be a sound investment into the future of both you and your loved ones. By organizing life insurance, you can relax safe in the knowledge that your health and wellness is in safe hands now and well into the future. Continue reading to find out why you may need life insurance and why it should rank highly on your list of priorities.
1. To protect you and your family
One of the main reasons why you need life insurance is to protect you and your family in the long run. If your loved ones depend on you financially, life insurance is key to ensuring they continue to receive an income when you die. This is especially important for parents of young children or adults that rely on the income of a partner or spouse and would struggle to stay afloat financially otherwise. In addition to this, you must also ensure you put plans in place to cover the cost of hiring someone tasked with the job of carrying out daily household duties such as cleaning, laundry, cooking, childcare, and healthcare.
2. To provide peace of mind
By organizing life insurance, you can be reassured that your loved ones are sufficiently taken care of in the event of an accident, emergency, or natural cause of death. No monetary amount could ever replace a person, but life insurance can provide much-needed peace of mind during such a delicate time. With so many factors to consider ahead of time, life insurance is one less thing to worry about. To purchase a life insurance policy, you must shop around for the best deal at the best price and weigh up the pros and cons of each before making an informed decision.
3. To pay off any outstanding debts
As well as protecting you and your family and providing peace of mind, life insurance can also pay off any outstanding debts. Examples of outstanding debts include mortgage payments, car loans, credit card loans, and personal loans. With a number of additional fees to factor in, such as funeral and burial costs, your family may end up requiring a four-figure sum just to make ends meet. With the emotional burden of the death of a loved one somewhat inevitable, life insurance can eliminate the financial burden that may ensue as a result.
4. You intend to start a family
If you intend to start a family, life insurance may be the last thing on your mind. But it can be a great motivator to safeguard the financial stability of your family if you were to unexpectedly die. The cost of raising a child can be an expensive business; with mortgage and education payments to consider in the not-so-distant future, starting a family should coincide with your first life insurance policy. There are several policies available that run until your child reaches maturity as well as after they reach the age of 18.
5. To contribute towards inheritance tax
If you intend for your child to inherit a portion of your wealth after you die, a life insurance policy is a must. With bills running into thousands, your child’s inheritance can take a substantial hit. But by organizing life insurance that covers the tax bill, your child can enjoy the full monetary amount. If this is the case, you may also benefit from putting your insurance policy into a trust. If the specified conditions are met, your assets no longer belong to you but to the trust. In accordance with the rules and regulations surrounding inheritance tax, your assets would then be exempt from inheritance tax.
6. You have a high-risk job
If you have a high-risk job, life insurance can mitigate any risks that may arise on a daily basis. This includes premature death, loss of income due to illness, or the sudden onset of a disability. If you work in aviation, construction, firefighting, mining, oil and natural gas, or logging, it may benefit you to organize life insurance.
Life insurance can protect you and your loved ones from sudden death or disability of the breadwinner of the household. It should be organized to protect you and your family, provide peace of mind, pay off any outstanding debts, if you intend to start a family, to contribute towards inheritance tax, and if you have a high-risk job.