Life insurance seeks to provide financial security to your loved ones when you’re no longer around.
In exchange for regular premium payments – usually monthly, your life insurer agrees to pay a predetermined sum to your beneficiaries if you pass away during the policy’s term. Life cover is based on factors including your weight, HbA1c, medication and complications which means you could save on new or existing cover based on updates to your health.
Life insurance should not be confused with critical illness cover (CIC) which is an agreement with your insurer to provide a tax-free lump sum upon the occurrence of a specified critical illness.
Here are 7 reasons why you should consider investing in life insurance:
Financial comfort for your loved ones
The sudden loss of a family member can significantly impact the financial stability of remaining family members. Life insurance ensures that your loved ones remain financially comfortable.
A survey by Aviva showed that families with a life insurance policy felt more financially secure after the loss of a partner compared to those without.
Avoid home relocation
The death of a primary earner can lead to financial strain, forcing families to move to a more affordable living situation. Life insurance can provide a safety net, ensuring your family can maintain their current residence without the added stress of relocating.
Protection against unexpected costs
Life is unpredictable. Life insurance can provide a buffer against these unforeseen costs, ensuring your family doesn’t have to borrow money or face financial hardships.
Maintaining a lifestyle
The loss of a family member can lead to significant cutbacks in spending on non-essentials, such as holidays, entertainment, and even basic necessities. Life insurance payout can help maintain the lifestyle your family was accustomed to, preventing drastic sacrifices.
Work-life balance for the surviving partner
The emotional toll of losing a partner can impact one’s ability to work, which is where life insurance can provide financial stability, allowing the surviving partner to make choices about their employment based on their well-being and not just financial necessity.
Peace of mind
Knowing that your loved ones will be taken care of financially can offer immense peace of mind.
Life insurance ensures that your family won’t face additional upheavals, such as moving or changing jobs, during an already challenging time.
Cover funeral costs
Funerals can be expensive. A life insurance policy ensures that your family has the necessary funds to give you a dignified sendoff without the burden of financial strain.