Risk Management

Life Insurance: Do you Need it? Is one policy enough?

May 2,2019 09:19 AM

Most people have insurance for their cars, homes and jewellery. But only a few have life insurance. Do we give more importance to the things we own than our own life? We need to ask, “Do you need life insurance at all? “ If you have loved ones, dependents to protect and don’t have savings, you definitely need insurance.

If you want to protect your family against the destruction of your business or estate taxes after your death, life insurance has to be considered. Or you want to protect your family against a loss of your income, insurance is the way to go.

Finally, how much insurance do you need? Here are five questions to help you decide. If you answer yes on any of the questions, then you need life insurance.

1. How much debt do you have? Do you add to your debt each month? Do you pay it down each month? If you have debt, you have to buy more life insurance to pay it off.

2. How much do you spend each month?

3. How much do you save each month?

4. What are your longer-term saving goals?

5. How much income do your survivors need if you aren’t around?

Experts say that you need to multiply your yearly income 10 times, that’s how much life insurance you need. But for the parent who are not employed but takes care of the children, they also need life insurance. So the surviving parent can cover the childcare and home maintenance costs that had been provided for free.

Always know your debt obligation as well as estimate any future education costs and to account for final expenses like medical bills, funeral and estate-settling costs that you leave behind.

The morale of the story is we need to protect our families and people who depend on us. Most people are loving and responsible, but they don’t act, because they think they are invincible or put off until later.