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Understandably, no one likes to contemplate the reality of dying. While it comes to us all eventually, it is the event of premature or unexpected death that can have a very severe emotional and financial impact on one’s loved ones.

Life Insurance Can Lessen The Stress

Having sufficient life insurance in place can at least lessen the financial stress at a very emotional and tumultuous time for a family.

How much life insurance is “enough”?

Life insurance in place should aim to cover the following:

  • immediate funeral and legal estate expenses;
  • settlement in full of the outstanding mortgage(s) on the residential property (and all other loans and/or outstanding debts). The aim is to leave the home mortgage-free and thus remove the stress and pressure on the surviving spouse/partner to meet ongoing mortgage payments alone.  If you also own investment properties, thought needs to be given as to whether you would wish to retain all the properties as a family legacy or sell one or more to eliminate debt – these are personal decisions that you need to make that determine the level of life cover required;
  • an additional sum to enable the surviving spouse/partner to assure the children’s quality education, as well as enabling the household to continue to function despite the untimely loss of one income earner. This can be either through lump-sum Life cover or a monthly benefit “Life Income” cover. The latter pays a monthly benefit for a chosen period of years to cover the ongoing costs of any lifestyle changes that may arise in the event of death and until all children reach an acceptable level of financial independence.

Review your life insurance cover

It’s wise to go through this exercise periodically with a trusted adviser to make sure that you have adequate life insurance in place.