As the COVID-19 pandemic has spread, we’ve been bombarded with reminders of our own mortality. It has reinforced the idea that illness and death can come at any time, and that has some people thinking seriously about life insurance.
Many people are not convinced when you tell them that life insurance is a form of savings and should form part of a good investment plan. The debate about whether life insurance is a form of investment still continues but it is important to think about how you can financially prepare yourself and your family, just in case.
Investing in a life insurance policy, can be one of the most important financial decisions you take.
Think about the events that have happened over the past decade such as the catastrophic bush fires in Australia in 2019, the Nepal earthquake in 2015, the Ethiopian Airlines Boeing 737 Max crash in 2019, the COVID-19 pandemic and the high number of vehicle crashes and crime that occur in our daily lives.
So, what is the link between these events and life insurance? These events were unforeseen resulting in injuries or loss of life. In business and private practice, people are at risk every day, whether driving to attend meetings, catching a flight or being exposed to a natural disaster. Investing in life insurance therefore provides an opportunity to ensure that your loved ones are taken care of and you have the peace of mind that their future is secured should there be an unpredictable event. Long-term insurance can:
• Provide financial security
Would your family be financially sustained if you were no longer around? Insurance provides financial security for members and their loved ones in the event of death, illness or permanent disability.
• Settle debt
The last thing members or their families want is to be burdened with huge debt. Be it a home loan, vehicle loan, personal loan or credit card, life insurance can provide for the settlement of these debts and ensure your family will not have to carry that liability.
• Leave an inheritance
If you would like to leave something behind for your children or dependants, a life insurance policy which names them as beneficiaries will ensure that they are financially secure when you’re not around anymore.
• Allow you to regain independence and confidence
If in your lifetime you experience a tragedy and become physically impaired, your insurance can pay up to 100% of the disability benefit depending on the severity of your condition and the cover you have.
In times of such events, the disability benefit will ensure you are able to fund your lifestyle changes if your ability to function has been impaired.
Also, as a corporate professional, your insurance can cover up to 100% of your total cost to company, covering you in the event of sickness regardless of whether you have paid sick leave days available or not. If you are a self-employed professional, your insurance can cover up to 100% of the effective net of tax earnings and business expenses.
It is never too early to start, if you intend to sign up for a life insurance policy. The younger and healthier you are, the cheaper the premium is likely to be, because life insurance premiums are mostly based on age and health.