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You know that life insurance is essential if you have children that depend on your income. But life cover is for more than just for your kids - it’s for anyone you support financially.
It’s easy to fall into the trap of believing you only need life cover if you have children. However, there may be other people who rely on your income and would struggle financially without it or your support, including helping with transport, cleaning, shopping and paying accounts. Answer these questions to find out if you need life cover for any other family members or dependants.
Are you supporting or assisting any family members financially or in other ways?
Think about your uncle who lives with you, the loan you gave to your cousin, rent for your parents or school fees and data for your niece, as well as taking your aunt to the doctor and the mall. That’s financial assistance and supporting your loved ones. How would these people cope if you could no longer offer them help?
If you pass away, a life insurance pay-out can give these family members the funds they need to cope without your income. If you are offering them financial support, chances are you will need life cover.
Married or living together? Life cover is a must!
Very few couples keep their finances completely separate, whether they are married or living together. If you pass away, your spouse or partner would still be liable for all the costs associated with the home and life you shared - and would have to do it on one income only.
Losing a spouse or partner is tough, as you miss the companionship and love. Life insurance cannot replace a spouse or partner, but it can make sure the surviving partner has time to downscale their lifestyle, pay off debt or move home.
How much is your debt?
Take a long hard look at what you owe to other people or institutions and add it all up to see the total amount. What happens to debt when you die? Quite simply, it needs to be paid! In full!
After you pass, your assets and all your debts form part of your estate, and before any assets can be distributed to your heirs, all your debts have to be paid. If your debts are large, your heirs could be left with very little and may even have to sell assets such as the home they live in to pay the debts. However, a life insurance pay-out could be used to pay debts, ensuring your assets are protected and can be passed down to your family.
Some of your debt may have insurance such as credit life insurance. In this case, if you pass on the insurance pays out and settles the debt.
Your contribution makes a difference, when you are around and when you pass away
You probably aren’t counting the many ways you contribute to your family and friends. It’s just part of life and who you are. However, your financial contribution makes a difference in their lives. You can continue to make that difference when you pass away if you have life insurance to help those who relied on you financially or in other ways.
Published on: 19 February 2020
Updated on: 6 March 2024
