12 September 2012

Should I ... Have Life Insurance?

Any sort of insurance is there to protect something. So the question is, What have you got which needs protecting? Or to put it another way, what could happen which will disadvantage you or someone else?
Here's some examples:
- You're the main breadwinner with a young family, and you have a mortgage. If you were to die or to be ill for a while then your family could end up on the street since you couldn't pay the mortgage.
- You are self-employed running your own business. If you are unable to work (even for a short time) then how will you pay the bills?
- You are concerned about contracting a major illness since it runs in the family. How will you cope with the extra expenses?
- You have an Inheritance Tax liability but don't want to give away your assets since you may need them to pay for residential care. How will your family pay the tax bill?
- You are a small business owner and you want to be sure that if you or your business partner were to die then the shares will not go outside the company. How will your partner afford to buy your shares from your estate?
... and of course there are many other scenarios where insurance would help. There are situations where it wouldn't help, though - if you are a single person owning your own house, and without any family, then it could be said that there is nothing to protect. Why waste money on life insurance?!
Life insurance can be pretty cheap in terms of a monthly budget, though, particularly for younger people. So it's worth considering a few scenarios to understand the impact ... or ask an adviser for a financial review.

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