How much life insurance cover do you need?
Life insurance is a way to provide for your loved ones when you die. The appropriate level of life cover will depend on the number of dependents and the amount of money you wish to be paid out.
When determining the right level of life cover, it helps to be clear about the purpose of life insurance. At minimum, life cover should be sufficient to cover all your outstanding debts. An adequate policy will assure you that your family will not have to worry about unpaid bills or the threat of losing property or other assets.
The cash sum paid out from a life insurance policy can also be used to pay for funeral expenses, estate fees and other related costs. What follows are a few factors to consider when deciding how much life insurance cover you need:
Loss of income
In many cases, life insurance is designed to cover the loss of income to your family that would follow your death. Life cover should be at least adequate to this requirement, in order to ensure your family’s comfort and ease their immediate financial burden. In the longer-term, the insurance benefit can be used to cover essential life expenses, like your children’s education.
Business continuity
If own a business, life insurance will deal with your personal debts, allowing the business to continue without unnecessary hiccups. This can be invaluable in assuring the ongoing financial health of your family.
Breadth of coverage
Coverage will also depend on the number of dependents you have and their particular needs, such as whether or not your spouse has an independent income. If you have many children, you will want to ensure that they are all adequately cared for, and will need to set your life cover as appropriate.
Hollard are trusted providers of life insurance policies in South Africa. Hollard’s life insurance cover ensures the financial wellbeing of those who matter most to you. Contact a Hollard broker today to discuss your unique life insurance requirements, Hollard brokers are qualified to give you the best advice about products geared for your circumstances.
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