The kind of protection you require and your prevailing circumstances will greatly influence how much life insurance cover is good for you. Some of the things you could be protecting may include your mortgage, loans and debts and a lump sum amount for your family to live a decent life after your demise.
Another determining factor as to how much life insurance cover you will need is how much you can afford to make as monthly contributions. Each cover varies from one individual to another and there is no such thing as one cover fits all.
Insurance for your mortgage
The most recurrent expenditure in your budget is the mortgage repayment. It is even worse if you are the sole provider and you do not wish you family and dependents to suffer losing their home in case of your death. In such a scenario, protecting your mortgage is a wise decision.
Most mortgage lenders will attempt to convince you to take up live insurance with them as a package, but you do not have to. You can do some comparison with other life insurance providers and see which one offers you the best deal.
Ensure that the cover you get is enough for repayment of the principal and interest amount.
Insuring other debts
The purpose of covering other loans you may have is to reduce the financial obligation for your loved ones upon your demise.
Insuring for expenses of childcare
This kind of cover depends on the number of children and their ages. You want to ensure that in the worst case scenario, your children have their needs met. This could include any unpaid responsibility you have as a parent and if you will need to set up for alternative or extra childcare plans.
With or without your presence, the education of your children is important to you. You need to especially prepare if the worst was to happen so that your children continue to attend the same schools as before and also be in a position to attend and complete their university education. In this case, it is important to highlight school fees and university education as part of the benefits for your beneficiaries.
Replacement for your family’s income
In your presence, you had set a certain standard of living for your family and loved ones. In the unfortunate situation that you are no longer there to provide, how much would be enough for them to continue with this level of lifestyle? The most challenging decision in life insurance since it involves predicting and anticipating the needs of your family in the future without your presence.
Healthcare without insurance is an expensive affair and can quickly drain your family’s savings. You should consider how long you will need to be off work to recover from an illness and the possible extra financial requirements that come with the health condition. With an life insurance cover, you can get specialized treatment and possibly quicken your recovery process without necessarily draining your bank account.