There are a few important investments to make in life. Not only will they come in handy in the future, but they also act as a much-needed safety net when you need it the most. Could life insurance be one of these?
Will it be a valuable asset while you are still alive and long after you have passed on? Here is what you need to know.
Creating a long-lasting safety net
One thing that the COVID-19 pandemic has revealed is how underprepared many South Africans were when it came to unexpected expenses that could cause a financial strain. Not only do 76% of people run out of money before month-end, but face a bleaker future with many South Africans being underinsured by R1.6 million.
Life cover acts as a financial safety net to protect you and your loved ones from major life changes that you might face such as the death of a breadwinner. It will help your loved ones afford the daily living expenses that they will face along with other future expenses, paying off of debt and a mortgage to name a few.
It’s for everyone
Having life insurance is for anyone looking to create a financial safety net that will help them when they need it the most. Whether you are single, married, starting a family, taking care of extended family members, or looking to leave a legacy. More so, when it comes to anyone looking to start or add to their financial planning portfolio that can secure their future needs.
You can use it while you are still living
There are situations where you can use the cover amount while you are still living. People who are diagnosed with a terminal illness do not only find themselves faced with a life-changing moment, but also find that the medical costs can be quite crippling if they do not have a financial plan in place.
While no one hopes to hear the news of being diagnosed with a terminal illness, it is better to be prepared to help you and your loved ones focus on the time you have than be burdened with the financial aspects of the illness. Having a life insurance policy means that you will have access to 50% - 100% of the payout, while you are still living after you have been diagnosed to help you and your family financially.
It can be beneficial towards your future plans
Life cover can be used as surety towards purchasing your dream home. This can reassure lenders that you are prepared to take on such a huge financial responsibility and that you will be able to make the repayments on your home loan, even in the event of death. While it may be beneficial in getting a foot on the property ladder, it is also crucial to understand the implications that come with using your life cover as a surety.
Covering your child’s future needs
Whether you are planning on having children one day or already have children, one of the biggest expenses you will face is the cost of education. Depending on where you plan to send your child (Private/Public) you could be facing anything between R1 million - R3 million to fund their education. The best time to plan for their future is now. Having a life insurance policy in place means that you can rest assured that their financial needs will be taken care of, even if it is a future without you.