November 16, 2020
If you are in the process of buying life insurance, you may be wondering just how much cover you should buy? This is where a life insurance needs analysis would come into play, as this question can only be answered by a life insurance needs analysis.
So what is a Life Insurance needs Analysis? A life insurance needs analysis takes into account your current family needs as well as your existing insurance plans. The objective of the analysis is to determine how much life cover you will need, and to then develop the right plan that talks to your specific needs in the event of death, disability, retirement, retrenchment or any specific future needs such as your children’s’ education.
If you think that your current income will be sufficient to cover the needs of you and your loved ones, wait until you lose your income as a result of death, disability, retrenchment or retirement. For example, in the unfortunate event of death, you need money to cover immediate expenses such as funeral expenses. Once these costs are taken care of, you need money to settle any debt or loans that need to be paid off. Finally, if you have any dependents, you need money to take care of their living expenses such as education costs, food, clothing, shelter and medical expenses (Did you know? Most families experience financial hardships due to loss of income when the breadwinner passes away).