Choosing the right life insurance for you and your family depends on your financial needs and current budget. Here are some ways to determine how much insurance will cover your needs and the policy options available.

Assessing your insurance needs

To choose the right insurance, start by determining what you need to cover. You can do this by understanding your current and future financial obligations and your goals.

Use a budget planner to get a monthly and annual picture of your current income, assets, liabilities, and debts. Consider some future scenarios, too.

Then, consider how you would cope with a drastic lifestyle change while keeping those who depend on you financially in mind. Some questions to think about include:

• Do you have enough savings to cover you for a period you can’t work due to illness or injury?
• Do you plans to purchase a property, or are you paying off one you currently have?
• What about other significant expenses you could have later, like a wedding or starting a family?
• Are you planning to contribute towards your children’s higher education or housing after they turn 18?
• What are your retirement dreams?
• Will your savings cover your funeral and estate management costs if the worst happens?

Determining the ideal cover amount

One way to work out how much cover you’ll need, is to consider insurance as income replacement. So, if you have a family and want to protect them should something happen, how much would they need to maintain their current lifestyle without your income?

Understanding policy features and options

With a range of life insurance products available, it’s essential to consider policies with your needs in mind. Also, think of the additional options many policies allow that may suit you, including:

• the option of standalone or bundled policies for a cheaper premium, and
• inflation proofing, which increases your cover and premiums each year to keep your policy in step with the rising cost of living.

Balancing affordability and cover

Reviewing your insurance can seem daunting at first, but we’re here to help. Your options include:

• reviewing the amount you’re insured for – the more protection you have, the higher your premiums
• evaluating any options or benefits that provide a safety net but come at an additional cost
• updating us on lifestyle changes that may reduce your premiums, such as an improved BMI (Body Mass Index), quitting smoking or giving up dangerous hobbies
• opting out of inflation proofing, or
• increasing your waiting period or reducing your benefit period if you hold Income Protection – you may have accrued leave or have other sources of income to rely on while you’re off work due to illness or injury.

Please contact your financial adviser or get in touch with us so we can help adjust your cover to a level that’s right for you.