One of the biggest advantages of having life insurance, is the way in which a policy will provide for your loved ones when you are no longer around. At the point of death, a lump sum benefit will pay out directly to your selected beneficiaries and so bypass your estate. Usually, the insured amount will far exceed what you are able to save through conventional savings efforts.
You are also afforded the opportunity to consider the scenario where you are still around. However, in this scenario you are left disabled and unable to take care of yourself. The costs of alterations to your house and car are overshadowed by your inability to earn a dent salary with which to provide for your family. Leaving money behind for your family is one thing but becoming an expensive burden to your family is an entirely different situation.
Peace of mind does not hold a price tag. Unforeseen accidents, diseases or sudden illnesses are some of the factors of life that we choose to overlook. The idea of knowing that you have arranged for protection in those instances should offer you an inner peace.
We’re kind off reminded of the Mastercard ad from the 90’s: “Some things in life are pricesless…” (like the peace of mind of your family being taken care off when you’re no longer able to),”…and for other things, there’s Mastercard.”.
It can be difficult to incorporate the premiums into your personal budget. With the high cost of living and low salary thresholds, it is often difficult to pinch off money to keep a life policy active. Paying money over monthly for something that can’t be seen, is never easy.
If you have delayed the process of applying for life insurance, you could find yourself in a situation where the premiums are simply too high, while the cover amounts are too low. As a rule-of-thumb, it is usually better to get insurance at an earlier age and to structure it in such a way, that the cover amounts increase as your age increases.
If you are unhealthy, have a troubling medical history that puts you in a higher risk class, or are engaged in activities that suggest you could die at an earlier stage, you could be denied insurance cover from financial institutions.
Wrong advice from uninformed financial advisors is probably the most concerning points of life insurance. Every individual is unique. Their circumstances change every day. There are a lot of variables to consider and only a seasoned or reputable advisor can assess your needs and structure your cover accordingly.
Important points to consider
Life insurance, much like medical aid cover, forms part of your financial planning. In the same way that you contribute towards your retirement goals, you must also consider what type of risk cover you need. In most instances of purchasing large assets like vehicles or houses, you will be required to adjust your cover amounts or keep separate life insurance to compensate for those debts in the event of your death.
While you are shopping for insurance or just undecided about whether you really need cover, keep in mind that there are many elements that can impact the monthly premium of a life policy. The aim should be to find the best premium with the best cover options for your unique circumstances.
As you get older and your health changes, your risk profile might need to be adjusted, which means your life insurance policy premium could become more expensive. If the age of the applicant changes while obtaining quotes, it can cause a sudden hike in the premium.
Because of these elements, it is important to first engage a financial advisor who understands your current circumstances and who has a firms grasp of what solutions would be best suited for you.
In conclusion, when it comes to life insurance, peace of mind does carry a price tag. The question is, are you willing to pay the price?
Your financial well-being is important. When last did you question your advisor?
At Africorp Advisory, we provide focused holistic wealth management advice and services. Our unique approach enables us to assess your cover and to align it to your current and future needs, while ensuring that your biggest asset, your income, is protected against any adverse events. Speak to a risk management specialist today.