Financial peace of mind for your loved ones after you're gone.
What is Life Insurance?
Life insurance is an insurance policy that pays out a guaranteed sum of money to the people named as the beneficiaries upon the death of the insured. There are two types of life insurance Term and Permanent.
Term Life Insurance
Term policies provide insurance for a fixed period of time and are usually cheaper than a permanent policy. Once the policy period expires the coverage ceases. Term policies can be renewed to extend the period or converted to a permanent policy.
Permanent Life Insurance
Permanent policies provide insurance that pay out whenever the insured passes, providing the premium payments have not lapsed. Permanent policies also accumulate a cash value which the insured can borrow against.
Visit our guide to understanding the basics of life insurance for an overview of how to choose the right Life Insurance policy for you.
Who needs Life Insurance?
Anybody can purchase life insurance to leave money for their loved ones, here are some common scenarios in which it is recommended you purchase life insurance:
If a parent dies then the remaining parent could face financial hardship from the loss of their income, insurance can prevent this. If the child had special needs then a policy could ensure that enough money was left behind to provide their care for the rest of their life.
People, married or not, who own property together often take out policies to ensure that if one person died the other would recieve enough money to cove the mortgage and taxes due on the property.
Young Healthy Adults
Often young healthy people take out policies to lock in low rates as premiums get more expensive the older a person gets, deteriorating health also leads to premium increases.
People with Student Loans
Many people who have student loans have them cosigned by their parents. People in this position often take out policies to clear their loans should something happen to them so that their parents are not left to make the payments.
People who have large estates often take out policies to cover the inheritence tax their beneficiares will have to pay on their estate.
Do you need Life Insurance if you get cover through Work?
It is beneficial to have you own policy in addition to any group insurance your company may provide. If your employment changes, whether through you choosing to change companies or being laid off you will likely lose your coverage as normally employees cannot retain their policy when they leave. Often work provided coverage ceases when you reach a certain age, whether you continue to work or retire you will lose your insurance at a time when you need it the most.
With a company provided policy you have limited options on the cover provided as it is designed to meet the needs of the group as a whole not the individual. Also as it is controlled by the company it can be changed or cancelled at any time without your consent as the contract is between the insurer and the company not you.
A personal Life Insurance policy will be a much better choise for you. You can tailor the policy to meet your needs, it will not be dependent on any employer and will ensure that your dependents continue to have the financial means to keep their home and lifestyle in the unfortunate event that you're no longer there to care for them.
For more information about life insurance please visit the Life Insurance section of our Insurance 101 guides.
Frequently Asked Questions
I'm single, do I need life insurance?
Just because you're single that doesnt mean you are alone, many single people buy life insurance to make sure they don't leave any debts their family would be responsible for or to ensure that they provide for relatives as they age. If you are in good health now it is wise to start a policy now, life insurance gets more expensive the older you are or if your health deteriorates.
How much life insurance do I need?
The amount of life insurance you need is dependent on your personal circumstances, things to consider include: what your living expenses are, how much debt you have and whether you have children. You can use our free Life Insurance Calculator to see how much cover you should have.
How often should I review my life insurance?
Your life insurance will probably need to be changed whenever a big life event takes place. Common examples include getting married (or divorced), having a baby, starting a business or retiring. Outside of this it never hurts to annually review your policies with your life insurance agent to ensure that your coverage is still at the right level to protect your family.
How do I apply for Life Insurance?
The application process is simple. It can be completed over the phone and takes about 15 minutes. Certain applications may require a quick 10 minute exam and can be conducted at a place and time chosen by the client.