Something that most young people don’t think they need and often they’re right, however it’s important to understand it fully so that you know when you need it.
The simplest insurance
Life Cover is the simplest of all insurance to understand, basically if you die, your life insurance policy will be paid out.
Obviously, you’re no longer around so you don’t get the benefit of the money, so what you’re really considering is who is left behind and what they may need if you’re no longer there.
As an example, if you have any form of debt (like credit cards, personal loans, mortgages) these will need to be repaid even if you’re no longer around.
No need to worry
If you have plenty of assets to sell to pay for these debts, then you probably won’t need to worry about life insurance, but if you have more debt than you have wealth, you should probably consider insurance so that once of your family members doesn’t get stuck with the bill.
The other most obvious reason to have life cover is if you have children or a partner (or anyone for that matter) who is relying on you financially.
In this case, it is critical that you do have some insurance in place to basically replace your income if you’re no longer around.
The same goes for stay-at-home parents. You may think that because you’re not working, you’re not generating an income, therefore you don’t need insurance.
You definitely need insurance because if the stay-at-home parent is no longer around, the remaining parent would either need to cease work themselves, or pay for help to look after the children, both of which cost money.
Often a lot more than you think.
I know it’s a bit of a dismal topic, but it is an important one, so I hope I have given you some food for thought.