Ever thought about what would happen to your family if something happened to you? It’s a difficult topic to think about, but it’s important to consider the financial well-being of your loved ones if the worst should happen.
Having life insurance is not just a luxury, it’s a necessity. It can help your family financially, even when you’re no longer there to provide for them. We’ll explore 5 reasons why you need family life insurance and how it can benefit them in the long run.
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To replace lost income for your family
Having a life insurance policy is crucial if you’re the main breadwinner in your family. It ensures that your spouse and children are financially protected in case of your untimely death. The money from the policy can be used to cover various expenses, including mortgage payments, bills, and everyday living costs.
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To provide for your spouse
If you and your spouse share an income, a policy can provide support for your spouse/partner in the event of your death.
One type of cover that can be useful in this situation is joint life insurance. This type covers both people under a single policy and provides a lump sum payment to the surviving partner. It’s usually cheaper than purchasing two separate policies.
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To provide for your children’s future
Help provide your children with the support they need to pursue their dreams and achieve their goals. Life insurance can help to cover a range of costs, such as university tuition, buying a house, or even starting a business.
Without protection, your children may face financial hardships or limitations in their future. They may have to rely on loans, or other forms of aid to fund their education. This can put them at a disadvantage and create unnecessary stress during an already difficult time.
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To cover funeral expenses
Funerals are a painful time for those who have lost a loved one. So the last thing anyone wants to worry about is how to pay for it.
Unfortunately, funerals can be expensive, so having the right cover in place can help ease the burden. That way, your loved ones can give the perfect send off without breaking the bank.
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To pay off debts and loans
If you pass away, your family will still be responsible for any debts or expenses left behind. A life insurance policy can help to cover those costs and provide financial relief for your loved ones. This allows them to focus on grieving rather than worry about paying such debts.
A mortgage, for example, can be a large debt to manage. The payout could help cover the remaining payments so your family won’t have to make ends meet to pay for it.
Which type of policy should I buy?
Level term Life Insurance
This type of policy provides coverage for a specific period, usually 10, 20, or 30 years. It offers a death benefit to your family if you pass away during the term of the policy. Due to this, it’s often more affordable compared to other types of policies.
Increasing term life insurance
Like level term life insurance, it pays out a fixed lump sum to your loved ones in the event of your death. The difference with increasing term life is that the death benefit increases over time as you pay your premiums. This can provide your family with greater financial security in the event of your untimely death.
Decreasing term life insurance
Used primarily to cover a mortgage, with the payout decreasing over time as repayments are made. This means that whilst you pay the same premiums each month, the amount paid out to your family decreases over time.
Whole Life Insurance
Unlike term life insurance, whole life insurance provides cover for your entire lifetime. It’s usually more expensive than term, but provides lifelong cover and financial security. Like level term cover the premium and payout value remain fixed throughout the policy.
Some policies also have an investment element, where your premiums are placed in an investment fund. If the investment succeeds, your family may benefit from additional returns on top of the death benefit.
How much will a policy set me back?
The cost of a life insurance policy can vary significantly depending on several key factors. These factors include your age, overall health, lifestyle choices, and the type and amount of cover you choose. Generally, younger and healthier individuals tend to pay lower premiums compared to older or less healthy individuals.
You can get quotes from multiple insurance providers. This allows you to compare prices and coverage options. Keep in mind that while price is an important consideration, it shouldn’t be the sole determining factor. It’s crucial to find a policy that suits your family’s needs and provides adequate cover.
Get covered and protect your family
Don’t wait until it’s too late to secure your family’s future. Take the necessary steps today to ensure that your family is taken care of, no matter what life throws your way. Remember, life insurance is not just about the present, but about safeguarding the future of those you hold dear.
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