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    Most of us secretly hope that we’ll make it to the ripe old age of 100, but we also know that’s not always the case. If you were to fall terminally ill or pass away unexpectedly, you’d want to make sure your family were in a financially safe position.

    Life insurance is one of those things that’s often mistakenly reserved for the elderly, or a major life-changing event – like having children or acquiring a mortgage. If you have people in your life who rely on you financially, you’re in the market for life insurance to protect them.

    It can be hard to know where to start to make sure you invest in the right type and amount of coverage. These steps can help you along the way.

    Do you need life insurance?

    When you die, your debts don’t just magically go away. There are funeral expenses to consider, the mortgage still needs paying and your children will still need to go to school. Your household will suddenly drop to one income, perhaps leaving your family in a difficult financial decision if you’re not prepared on their behalf.

    Determining whether you need life insurance depends on having financial dependents, accumulated debt, or enough money to settle your expenses after the unthinkable happens. Most people generally require life insurance.

    How much life insurance do you need?

    There are a couple of factors to consider. The first is what financial needs your family will have after your death, usually funeral expenses, debts and living costs. You should also account for the speed at which financial resources are made available to your family after your death. For example, some assets might not be released to your children until they’re 18, and it might take a couple of weeks for the bank to grant access to any savings.

    Then, subtract from the equation what financial resources of their own your dependants have. This will help you to determine the sum of your policy.

    Do you have any additional requirements?

    Most life insurance policies come into effect once you’ve passed away, but what if you were to fall terminally ill and could no longer work? ACC only covers loss of income due to accidents. Some companies offer life insurance with trauma or income protection added on. Others have separate policies but give discounts if you take more than one.

    What type of life insurance do you need?

    Term life provides cover for a set period, say 30 years, or to a specific age. This is the most common type of life insurance because it’s budget-friendly. If you prefer, and can afford, a policy that covers you for as long as you live, then you can take out a whole or universal policy.

    Avoid making these common mistakes

    Putting it off until it’s too late – it’s a fact of life: as we age our health deteriorates. What most people don’t realise is that age has an impact on your insurance options.

    Not enough cover – balance how much cover you need with what you can afford to pay. Avoid stabbing in the dark or going for the cheapest premium.

    No cover for your spouse – don’t just insure a household’s main income earner –spouses need cover too. Especially if, after a death, they need to take time off work.

    No add-on benefits – insurance planning should make sure you’re covered if the unexpected happens, including getting sick and not being able to work. Some policies cover you for more than death. Consider whether you need extra cover if yours doesn’t.

    Not reviewing your policy – now you have life insurance, don’t just set and forget. Circumstances change – you might have another baby, or purchase a more expensive home. Your insurance policy needs to evolve with you.

    Make sure you tell your family

    Once you have your policy in place, make sure your family is in the loop and aware of the details. Store your insurance documents in a safe place where your beneficiaries have easy access, and notify them of any specifics.

    Peace of mind – get expert advice

    Insurance isn’t always easy to understand, and it’s hard to invest in something you won’t ever use (but your family will). As the saying goes, you’re better to have insurance and not need it, than the other way around.

    Engaging the help of insurance advisers can make all the difference. They can explain what options you have, make recommendations on the type of cover you need, and find a premium that best suits you and your family’s financial needs.

    For help organising your life insurance, call on the expert insurance advisers at Global Finance. They’ll have you sorted in no time.