How You Know It’s Time To Reassess Your Life Insurance

Apr 9, 2024 | Life

Life is a journey marked by significant milestones that shape our financial responsibilities and obligations. From getting married and buying a home to starting a family and pursuing entrepreneurial ventures, each life event brings unique challenges and opportunities. Amidst these major life transitions, the importance of life insurance shines brightly as a crucial tool for safeguarding our loved ones and securing our financial legacies.  

Let’s take a few minutes to explore the different major life events that indicate it’s time to reassess your life insurance needs.  

Getting Into Property 

Thinking of buying a home? It’s a big step and among the expected admin and financial commitments involved, a lot of people are surprised to learn that life insurance may be required as part of the purchase agreement. It’s true that not all banks make life insurance part of the contract, but even if this isn’t the case, it’s strongly advisable that you do get a policy or update your existing cover to include your home loans. 

What you don’t want, is for something to happen to you, leaving your loved ones to pay these hefty bills or have to sell the house because they can’t afford to stay put.  

We Love An Extended Family 

South Africans are, generally, speaking, a family-oriented people. The most popular household type is that of the “extended family,” in which several generations of people live together. This can include parents, children, in-laws, grandparents, aunts, and uncles, and cousins. 

If you’re a financial contributor to an extended household, helping to support aging parents and young children, having life insurance is crucial. This policy will go towards all your outstanding debts, accommodation, school fees, medications, and all the extras that are needed in a multi-generational household. 

Congratulations, You’re Married 

For many people, getting married opens the door to a whole new adventure. For others, nothing much changes on the day-to-day front. But what’s certain is that this life event involves a financial commitment to support another person. That’s why life insurance is so important when you get married. It can be a huge relief to know that should anything happen to either of you, there is enough financial support to maintain your current comfortable lifestyle. 

It’s Time To Have Kids 

Perhaps one of the most common reasons to get life insurance is when you start or add to your family. Primarily, this is because the loss of a parent’s income can be financially devastating.  

From the moment you discover that you’re pregnant, there’s a total shift in how you view most things in your life, from where you live and how many plug points need safety attachments to how you spend your money. It’s part and parcel of being responsible for a new life. In order to ensure that your growing family is financially secure, has a safe home and enough to live a good life and get a great education, this is the time to reassess your life insurance needs.  

Dealing With Divorce 

Outside of the emotional implications, a divorce can also wreak havoc on your finances. The typical bills that were split now have to be covered on your own, which can be quite difficult. What should also be checked off the list of things to clean up during this often-unpleasant process, is reassessing your situation and planning accordingly for your future. This includes your life insurance. 

Essentially, you may want to remove your ex as a beneficiary. Your ex may do the same and remove you, so if you don’t have a policy to begin with, this is the time to consider getting your own cover. If you have kids, then you might consider taking out a policy on your former spouse that you own and pay yourself, so that if your ex passes away, you’ll be able to substitute and maintain the child support.    

Going Into Retirement 

The reality is that retirement costs money, and while some of your expenses will decrease after retirement, you’ll still have things like housing costs, groceries, increased health costs, transport, taxes, and, of course, life insurance.  

Part of planning for your retirement means taking a look at your expenses and reducing what you can in order to embrace your golden years. Some are tempted to cash in their life insurance, but you should still consider the fact that life insurance can provide a pension replacement if your spouse can’t receive your pension after your death and can pay estate taxes to your beneficiary at the time of your death. 

It’s Business Time 

If the entrepreneurial bug has bitten you, then make life insurance a top priority. You see, life insurance plays a critical role in safeguarding the future of entrepreneurs, their families, and their businesses by providing financial stability, covering debts and expenses, ensuring continuity, and supporting long-term planning. 

Feel informed?  

We know that change is inevitable, and life can take unexpected turns. Life insurance offers a safety mechanism to ease the financial anxiety of unfamiliar terrain, whether you’re moving from employee to business owner, wife to mother, or professional to retiree.  

What we’ve found is that a policy like life insurance places the power to look after yourself and your loved ones in your hands. What we would also say, though, is that it is highly prudent to get advice from a financial advisor as to whether you should keep your existing policy as is, if you should increase your life insurance, or make any other changes that could offer the most support for your family. 

Don’t forget that in addition to life advice, AA Inform can also help you compare home and car insurance costs through the AA Insurance Supermarket and even obtain a Free Vehicle Valuation Report, which tells you how much your vehicle or a vehicle you’re interested in buying is worth. 

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