Do I need life insurances?

What Should I Consider When Deciding If I Need Life Insurance?

When considering whether you need life insurance, it’s crucial to assess your financial situation and obligations to determine if your loved ones will be adequately provided for in the event of your passing or if you become disabled or sick and unable to work. Factors to consider include your mortgage or rent that you pay, any outstanding debts, and the financial needs of your dependents, now and in the future. Additionally, think about factors such as living expenses and the cost of living, and how insurance can help cover these expenses should you no longer be around to provide for your family.

What are the different types of life insurance?

Understanding the different types of life insurance is essential in selecting the right coverage for your needs. 

Life insurance

Life insurance pays out a lump sum of money to the nominated beneficiary if the insured person passes away or is diagnosed with a terminal illness. Typically, when you consider if you need any life cover, you would look at several factors including:
1. Dependents: If you have dependents such as children or a spouse who rely on your income for financial support, life insurance can provide them with financial security in the event of your death.
2. Debts and financial obligations: If you have outstanding debts, such as a mortgage, personal or car loans, life insurance can help cover these expenses so your loved ones are not burdened with them.
3. Income replacement: If your income is a significant contribution to your family’s finances, life insurance can replace that income and ensure your loved ones can maintain their standard of living and ongoing living expenses after you’re gone.
4. Funeral and final expenses: Life insurance can help cover the costs of your funeral and any other final expenses, relieving your family from the financial burden during a difficult time.
5. Future needs: Even if you don’t have dependents or significant debts now, life insurance can provide for future needs such as paying for your children’s education or leaving a financial legacy for your loved ones.

TPD insurance

TPD insurance pays out a lump sum of money if the insured person becomes totally and permanently disabled and is no longer able to work ever again. When considering if you need TPD cover, you should look at the financial impact of being unable to work due to a disability and whether you have sufficient alternative sources of income or support. You should also consider your current financial obligations, such as mortgage payments or other debts, and whether you would be able to meet these without your regular income. Additionally, you should assess the cost of medical treatment and ongoing care that may be required as a result of the disability. 

Trauma insurance

Trauma insurance pays out a lump sum of money if the insured person is diagnosed with a prescribed critical illness, with the most common being cancers, heart attacks and strokes. Trauma insurance is generally recommended if:
1. You have a family history of critical illnesses such as cancer, heart disease, or strokes, and want to ensure you are financially protected in case you are diagnosed with a similar condition.
2. You want the financial security to cover medical expenses, ongoing care, and lifestyle changes that may be necessary after a critical illness diagnosis.
3. You do not have sufficient savings to handle the financial impact of a critical illness.
4. You want to ensure that your loved ones are financially supported if you become unable to work due to a critical illness. 

Income protection insurance

Income protection cover pays out a monthly income to the life insured if they are unable to work due to accident or illness. Income protection covers your biggest asset which is your ability to earn an income and is recommended if:
1. You have dependents or a family to support
2. You have high living expenses and bills to pay
3. You do not have enough savings to cover your living expenses if you were unable to work
4. You are self-employed or do not have access to sick pay or disability benefits from an employer
5. You want peace of mind knowing that you will have a financial safety net in case you are unable to work due to injury or illness. 

Consider these factors when evaluating your need for life insurance and determining the amount of coverage you may require. It’s also important to review your life insurance needs regularly as your circumstances change. 

How a financial adviser can help with your life insurances?

A financial adviser can help with your life insurances in several ways:
1. Assessing your needs: A financial adviser can help you determine the amount of life insurance coverage you need based on your financial situation, dependents, and future financial goals.
2. Choosing the right policy: With a deep understanding of the various types of life insurance policies available, a financial adviser can help you select the right policy that aligns with your needs and budget.
3. Comparing options: A financial adviser can help you compare different insurance providers and their policies to find the best coverage at the most competitive rates. They can also structure the payment of the premiums to suit your needs best.
4. Reviewing and updating: Life changes such as marriage, the birth of a child, or a change in employment can impact your life insurance needs. A financial adviser can help you regularly review and adjust what you would need to cover to ensure it remains suitable for your current circumstances.
5. Estate planning: A financial adviser can help you incorporate life insurance into your estate plan to ensure your loved ones are financially protected and your assets are distributed according to your wishes.
6. Claims assistance: In the event of a claim, a financial adviser can provide guidance and support to ensure the claims process is smooth and efficient for you or your beneficiaries.