When do you need to get life insurance?
Life insurance is about preparing for life’s emergencies and protecting those around you. But is there a right time to get it?
One of the main reasons people buy life insurance is because they have dependents. A dependent being any person, generally a family member or partner, who relies on another for financial support.
The reasons are obvious, you want to protect the people you care about, but when exactly do you need it?
Perhaps you are thinking about starting a family or you are about to pop the question to that special someone. It is these life moments that often trigger us to start thinking about how we protect ourselves and the people important to us.
As your own financial decisions become closely connected with another’s, you’ll start to recognize the importance of having some life cover in place.
- Having a baby
- Buying a home
- Financial change
- Getting married
- Illness or death of a close relative
The Five Biggest Triggers
1. Having a baby
Starting a family is one of the biggest triggers motivating Australians to take out life insurance. This should come as no surprise. It’s a big decision to make in the first place, and it also comes with significant financial obligations for the long term. More than any other life event, you’ll be thinking about how your growing family will cope if anything were to happen to you or your partner which might impact your financial security.
2. Buying a home
A big milestone in anyone’s life and you probably took out a mortgage for it. Considering it is one of the largest investments you’ll ever make, it is important to make sure there is adequate insurance to protect the people that depend on you in the unlikely case that you can no longer meet your commitments.
3. Financial change
Several things could have happened – a family member has become more dependent on you, you’ve had to spend an unexpected large amount of money, or maybe you’re starting a new job or business. When you experience a significant change to your financial situation, you may find yourself reconsidering your finances and therefore start thinking about how to protect your income.
4. Getting married
Tying the knot with that special someone is an important personal decision, and it also comes with significant financial obligations. As our spending power has increases, you’ll begin to make decisions based on a combined wealth. You might have more wealth to work with, but a greater reliance on two incomes will come with it. It is important to take out adequate insurance that will protect both you and your partner in case of sudden emergencies.
5. Illness or death of a relative
We all feel invincible until something happens that makes us stop and think. When illness or death hits close to home, we begin to reflect on our own health and security. Though it’s not exactly something we want to think about, buying life insurance young will save you money. Plus, the added peace of mind.
Other life moments to consider:
- Your own illness or injury
- Friend’s life event
- Loss of coverage
- New job
- Starting a business
- Natural disaster
Is it time you bought life insurance?
Though there might not be an exact moment or age to purchase life insurance, it is worth reviewing your current financial situation regularly to determine the right moment. Ironically, life insurance is one of those essentials we hope never to use but can’t ignore forever.
Deciding when and if you need life insurance can be difficult to pinpoint. If you’d like to speak with a certified financial planner to discuss your options freely, get in touch.
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