The old adage goes that the only things that are certain are death and taxes.
Given this inescapable reality, it's important that you make sufficient
provision for your loved ones should you die unexpectedly. It will be hard
enough for them to successfully deal with your demise, without also being left
unable to pay bills, or to maintain the lifestyles that you all lived while you
were alive - let alone being left destitute.
This is the major reason for life insurance. It allows you to take out an
insurance policy that will become payable on your death to those you have
nominated as the recipients. This payment can be in the form of a lump sum, or
in the form or regular payments.
Here are some concrete examples of the kinds of things that a life insurance
policy can help your family with:
- House bond repayments - your insurance payout can help to ensure that
your family can continue to afford to live in the family home.
- Compensating for the loss of your salary or other income - to put it
bluntly, losing you also means losing the money you earn that has been
helping to support your family. Insurance will minimise or eliminate this
loss of income.
- Providing for education expenses - you would certainly still want your
children to receive a decent education in your absence, so insurance can
make provision for these expenses and ensure that their education does not
suffer.
- Lifestyle maintenance - as a family you'll have put in a lot of effort
to gain your current lifestyle - life insurance will help your family to
maintain this and not have to compromise on a decent lifestyle.
- Debt repayment - most of us live our lives with some forms of debt, and
the last thing you want is for your family to be burdened with debts that
they cannot pay. Life insurance can cater for these repayments.
There are clearly plenty of solid reasons for making sure that you have
sufficient life insurance. It's equally important that you take out an
appropriate and reliable life insurance policy that will in practice provide the
necessary financial security that your family will need.
Finding the right insurance policy is therefore crucial. It's quite easy to
take out a very expensive and lavish insurance policy, but you also don't want
to overburden yourself with premium payments while you're alive. So you need to
find the balance between full cover and affordability. You need to get the best
insurance possible and the best cost. Like with most things, it's value for
money that you're after.
The rest of the information in this guide will give you pointers in the right
direction, and our life insurance reviews will give you in-depth information on
the actual options available from the various insurance providers.
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