Life insurance is designed to pay a lump-sum in case of death or terminal illness. Of course, it’s not something easy to think about, but it’s important nonetheless. And depending on your situation, it could make all the difference.

Getting married, having a baby, buying a house: these are just some key life events that can trigger the need for life cover. More broadly, if you have dependants and/or high levels of debt, life insurance is probably worth considering. Here’s why, according to our SHARE advisers.

Having dependants

It’s important to note that life insurance is not about you, but the people you may leave behind. So, if you have someone depending on you financially – like a partner, children, or even elderly parents – taking out life insurance could be  a good idea.

Some couples use life insurance to secure the surviving partner’s ability to pay down debt and cover bills. Plus, if you and your partner are actively saving for a big goal (like a home deposit, retirement, or tertiary education for the children), you can include that in your calculation as well. These are all key things to factor in when determining your life insurance amount.

And remember, life insurance is not just for the breadwinner. While they don’t receive wages, stay-at-home parents contribute to the family in many ways. What would happen if they were no longer around?

Besides the emotional impact, there may also be extra costs to cover, just to handle those daily tasks. Plus, the remaining parent might have to take time off work, seeing their income reduce. That’s where having life insurance can provide invaluable peace of mind.

Having high levels of debt

Are you a homeowner? Unless you had enough cash to pay for the house in full, you most likely have a mortgage. And a mortgage is a big, long-term financial commitment. That’s why it’s crucial to protect your family’s ability to repay it should the unthinkable happen.

Many people take out at least enough life insurance to pay off the mortgage in full, so that their loved ones don’t have to fund that cost on their own.

Some also add trauma cover to it, which provides a lump-sum amount in case the insured is diagnosed with one of the critical illnesses or serious medical conditions listed in the policy. The list of covered conditions varies from provider to provider, but they usually include things like cancer, strokes and heart attacks (unless there’s a specific exclusion).

What about personal debt? Another common reason to take out life cover is if you have a high level of personal debt, including credit cards and loans. While it might not amount to much, being able to repay it in one go can relieve a lot of financial stress on the family.

So, do you need life insurance?

If you’d like to discuss your options in more detail – including what level of cover might be right for you and your situation – please don’t hesitate to contact our SHARE advisers.

We can help you explore your options, find a policy that meets your needs, and get your financial future protected.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.