Your Life Insurance needs will Change as you Change

In South Africa people are generally adverse to taking policies such as Life Cover unless they absolutely need to. The article below attempts to let you know exactly what your needs may be at different stages of your life.

The younger you are you typically have less need for Life Insurance but it is also easier to get a very low premium as firstly you are young and secondly the chances of your health negatively influencing your premium is also less and many companies will not re underwrite you after the initial underwriting when you take out your policy. When you grow older your need for life insurance increases as you've taken on more responsibility but after a while your responsibilities will  diminish again meaning that your need for life insurance is likely decrease again. It is important to remember that the older you are the more your life cover will cost generally speaking.

Young and Carefree

As a young person; you become independent and can take care of yourself, you no longer depend on your parents to support you financially and in the majority of cases a financial hardship will not be created should you die at this point. For most young and single people  Life Insurance at this point is not all that important.

At this stage taking life insurance may become more important if you are at risk of developing a disease such as Cancer or Diabetes later on in life as you may be refused Life Cover or at least your premiums will be considerably higher once these eventualities take place.

If you have taken a home loan and you have someone who has cosigned this your death would leave that person responsible for the entire debt. You would be wise to purchase enough Life Cover to cover your home loan in the event that the worst happens.
Funeral cover is most times not required as you can take a life cover that pays out an immediate expense benefit in the event of your death to cover the funeral; this is a smaller amount paid from your Life Cover benefit usually within 48 hours of receiving death documentation.
 You will be in more desperate need of Life Insurance if you are supporting a parent or grandparent and as well as if you have a child as they would need financial support in the event of you passing away.

Tying the knot

 If a young married couple contribute equally to household and have no children they typically have little need for Life Cover as the death of one partner may not be a financial catastrophe for the other. Once you buy a home however this whole scenario changes as the death of one partner may make it impossible for the other to pay the bond by themselves; even if both have high paying jobs. A moderate amount of Life Cover in this case on both lives is considered to be the minimum consideration to be taken as it will at least provide for peace of mind that both you and your spouse is covered should the worst happen to either.
 Once again if you caring for parents or children before marriage this situation becomes even more dire.

Growing your household

With the pitter-patter of small feet comes huge increases in responsibility and therefore huge increases for the need for Life Cover. The need for Life Cover for both spouses cannot be over stated at this point.
If your home has a single income the family is completely dependent on the bread winner and if the bread winner is without Life Cover the consequences is likely to be devastating. life cover will also be needed on the life of the stay at home partner as provision will need to be made for expenses like after-care; daycare and other living changes.

In double income homes the need for Life Cover is just as important as the surviving spouse may not have the income to meet all the household needs by themselves.

A mover and shaker

Career advancement often means moving employers or even starting a business it is very important to call your financial advisor whenever this happens as a review of your financial plan will need to take place immediately. Your advisor will look at what your options are considering employer benefits and your underwriting needs should you make certain choices. You may end up paying a lot more for coverage now due to age and pre-existing conditions.
Starting a business has its own issues due to whether you were married in Community of Property or not as well as the fact that you don't want your family penniless due to business debts should you pass away.

Dissolution of Marriage

You and your partner may be together for only a while instead of forever and this obviously brings about issues of whom the beneficiaries are and it only gets more complicated if you have children.

In retirement

In most cases here the need for Life Insurance diminishes again due to less people depending on you and homeloans being paid off. However; this is not always the case as you might still have debts or a partner who no longer enjoys your annuity income or even estate duties in which case the need for moderate Life cover still exists