Why Life Insurance ?
The Cornerstone of any Good Financial Plan
It is a sad fact that sooner or later all of us will pass away. Because of this fact, life insurance should be an extremely important part of your financial plan. However, in many cases this doesn’t always happen as most people that do engage in financial planning tend to be more focused on longer term retirement and investments goals with little or no consideration given to the ever present financial risks that your family are exposed to if you were to die, or worse – you were to suffer an illness or injury that would prevent you from earning an income.
Protecting Your Family
To a lot of people life insurance isn’t something that is well thought out, many of us merely associate it with something that covers the cost of funeral expenses or a lender requirement to draw down a mortgage. Although this is true to a certain extent, there is a lot more to it than just that. In reality; life insurance is something that should be taken out to replace the lost income of you or a loved one who is no longer around. It is because of this loss of income that it is an important part of your financial planning.
Financial planning is all about making sure that you are secure when it comes to your money and your expenses. Life insurance becomes incorporated into your financial planning if you have people who depend on you and if your death creates an economic loss for your family, business or estate. It ensures that your family is protected even when you are not there to ensure it yourself. It is the start of a process that ensures your loved ones have financial security and stability. Death is final, but with any untimely death your living costs end. What happens though if you were to suffer a serious injury or long-term illness where you are no longer able to work?
Protecting Your Greatest Asset
I believe your ability to earn an income is your greatest asset! The income you earn determines your lifestyle. It’s easy to think of all the ways you use yours; it pays for the day‑to‑day living expenses and bills that allow you to create a home and provide for your family. It also helps pay for special occasions that create lasting memories. If it suddenly stopped, how drastically do you think your life would change? Would it have a massive impact on your financial, physical or mental well-being? If yes, then Income Protection is an important addition to your financial plan. If you think the State Benefit would be insufficient to meet your expenses, and you have few other financial supports should you be out of work indefinitely, then it is worth considering, big-time!
What Next?
No matter how complex or simplistic your financial life, if you have dependents and you earn an income then you must consider life insurance as an integral part of your financial plan. When it comes to financial planning, reviewing your life insurance requirements is as good as any a place to start.
