Protection for Your Family – Life Cover Essentials

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Let’s have a tough conversation. Will your family be okay if you die or are unable to work? 

It’s something we don’t like thinking about, but it’s all too real. Accidental death and disability can happen to anyone, no matter how fit or young you are. Ensuring that your family is financially secure is vital for your peace of mind and theirs.

Do you have Life Insurance? 

Life insurance protects your loved ones financially when you are no longer around to do it. Let’s focus on your spouse and children.

Will there be enough cash available to take care of them? If you have small children, the cost of raising them till they graduate and become financially independent could be well into the millions.

Will there be money to cover their tertiary tuition? Will your children be able to attend a university or college of their choice, or will they have to get a job out of high school to make ends meet?

Where will they live? Fortunately, many mortgage companies make life cover compulsory to cover the mortgage if anything were to happen to you, but that is not always the case; your family may lose the house if they cannot afford to make the mortgage payments. A fully paid home will give them peace of mind.

Will your spouse have to find work to support your kids? If your spouse is a stay-at-home partner, will they have to find work to support your children?

Let’s do the Life Cover Math

Choosing life cover is not just a ballpark figure guess. You must know exactly the lump sum you require and the term of the policy, whether it is for life or only for a certain term until it is no longer needed. Below are just some of the elements to consider when taking out life insurance policies.

  • How much will your wife need until retirement?
  • How much retirement income will she need? Does she have a separate retirement policy, or will the life cover include this?
  • How much is needed to raise your children till they graduate from university, or become self-sufficient?
  • How much is needed to pay off a mortgage?
  • How much is your debt? How much will you need to cover your debt?
  • How much will tertiary education tuition cost for all your children? Include this if you don’t have an education plan.

You might already have education savings plans for your children and retirement plans for your spouse, but if you were to pass on, suffer from a critical illness or sustain a disability, would you be able to continue premiums till the plans mature?

Why do Life Insurance Policies need Regular Reviews?

Your life cover must be reviewed regularly, as your needs, debt and coverage amount will change over time. For example, you might no longer need extra cash to pay debts or a mortgage, your children are already adults and don’t need tertiary tuition, or you are near retirement age and no longer need retirement cover for your spouse as your retirement savings are sufficient.

Life cover premiums are determined by age, gender, lifestyle, and health, but generally, the younger you take out life cover, the cheaper the quote will be.

Each person’s circumstances are unique, but the common denominator is that you want to protect your family and ensure they are taken care of if you are no longer around. Your deVere financial advisor will help you determine how much life cover you need.

Make sure that your family is taken care of, and your debts are covered if anything happens to you, you become disabled or suffer a critical illness.

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.


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