What is your life worth to your family? And what kind of a miserable question is that?!
The truth is, no-one wants to think about mortality, or what would happen to their family if they were suddenly not around one day, but one of the responsibilities we have as parents, is to ask ourselves this question in order to ensure we make provision for if that were to ever happen.
This is where life insurance comes in.
Life insurance is one of the most basic and fundamental insurances that families should have in place in order to protect the financial futures of their loved ones in the event of a tragedy.
But how do you determine what you are “worth” to your family?
In and amongst addressing all the various life insurances (disability, sickness and Income Protection included) to see how your family’s needs can be covered, establishing your ideal levels of cover is a big part of the service I provide when I work with clients to implement an insurance strategy.
If something were to happen and you were gone tomorrow, what sort of lifestyle adjustments would your family need to make in order to cover ongoing living expenses – in most cases, a working surviving partner would at the very least need to lessen the burden of time taken up by work to be more involved with your children. On the flipside, a non-working partner would likely need to find a source of income to support the family.
I’ve put together a quick checklist to provide some food-for-thought regarding your Life Insurance to help you determine if you have the right cover in place.
1. Clear Existing Debts And Mortage On Family Home
- What debts would your family need to cover?
- Would they be able to pay off the mortgage, or buy a family home that they could live mortgage/rent free for the foreseeable future?
2. Cover Future Education Costs For Your Children
- Do education costs need to be covered?
- What about Child Care costs?
3. Provide An Ongoing Income And Provision For Living Expenses For Your Family
- How much would you expect your partner (husband or wife) to need to rely on a working income to support the family? Would you want your life insurance provide for an ongoing monthly income to cover living expenses, and for how long?
4. Leave An Inheritance
- Do you want to provide for any lump sum provision for your children (inheritance) when they reach adulthood?
5. Consider Offsets
- What assets do you currently hold that could be used to offset the above financial requirements for insurance?
Make sure you have the right levels of cover in place.
At first look, these questions may seem a bit daunting – I mean, how long is a piece of string!?
Whilst the above questions by no means cover ALL the considerations you need to think about for your family if something were to happen, and do not consider any other types of insurances, the list should hopefully provide you with a starting point to assess any insurances you may already have in place.
If you would like to arrange a time to catch up to have a more in depth (and confidential), discussion, please feel free to contact me at any time.
Part of my service as your adviser is to work with you to determine your needs and find a level of cover that would meet your goals and objectives, and provide you with peace of mind that if anything were to happen to you, in and amongst the devastation that this causes a family, at least you know your family would be taken care of financially.
Peace of mind, in the face of tragedy, is priceless.
This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.