How much do I need?
Life Insurance is a crucial part of family and financial planning, however, most of us are not sufficiently covered for our needs. In some cultures, people do not like to consider life insurance as they see it as being morbid. Many of us feel fit and healthy and don’t think it will happen to us. Mothers and Fathers have strong paternal instincts to protect their families and to provide for them yet when it comes to Life Insurance most of us spend very little time evaluating our families real needs. You must realise in the event of your death that if you wish your family to continue to have the quality of life that they were accustomed to, you must have sufficient funds to cover them for the correct period of time.
At Empire Consulting, we adopt an innovative approach to financial planning & wealth management. Our mission is to help you increase your assets without increasing risk.
How much do we have in liquid assets and savings?
What is the amount of money my family will need per month to pay all their bills?
How many years will they need this income?
Will there be big events that need to be paid for? (Wedding, University, Holidays)
Answering these questions will help us to arrive at a value of protection that is adequate but you must also consider that your family may need time away from work whilst grieving to support children, there may be costs for child care and psychiatric help. Life will not continue as usual and there are added costs that should be considered for the welfare of your family and to reduce stress at this time. This will help you to understand the real amount of cover that your family needs.
In many families there is one major financial contributor and normally this is the person that has the life protection whilst the partner who has a lesser income or stays at home with the children has no cover. You may think why should I cover a person with little to no income? This is a serious mis-conception and one you should address today! Think about it, if your partner was to die what would that mean to you? Could you just carry on as normal going to work and following your routine? In most cases you would stop working for some time and may even lose your position as a consequence. You may need to provide psychiatric help for you and your children, you would probably need home help to help with the children’s daily routines. Now do you see that your partner has a value much higher than just the income that they may or may not generate? Spouse protection is very important and in most cases never even considered. We hope that these ideas may help you to realise how important Life Insurance is and what should be considered.
False Sense of Security!
Many people have a false sense of security as their company provides life insurance. The problem here is that Life insurance costs very little when you are young and healthy but every year older you become your risk to an insurance company increases. This means that if you no longer have employment you will no longer have insurance and if you were to acquire insurance later on it will be far more expensive than if you had acquired it early and locked in a low annual rate.
You may find that upon applying that you now have some health conditions that could make the cost of insurance too high, or even worse you may be uninsurable and leave your family with no protection at all. If you are seriously concerned with protecting your family you must consider having your own private insurance policy to protect them.