What is life insurance & why you need it?

CLIENT QUESTION:

What is life insurance and why do I need it?

OUR ANSWER:

Life insurance is always a difficult topic to talk about as we humans don't want to think about us not being around. But do your family and children a favour and have your insurances reviewed. I feel morally obliged to educate all my clients about life insurance and the consequences of not having enough cover.

Imagine a scenario: You are the sole earner in your household and you pass away leaving your family behind with a mortgage and childrens' education, etc to pay on top of meeting their day to day financial needs.Not a good thought right?

Let me educate you on life insurance now. Life or Term Life Insurance pays out a lump sum if you die before a pre-agreed date (the term). With Term Life Insurance the life you're really insuring is yours to provide for your family and dependents if you weren't around, with the lump sum being enough to provide for your family's long-term financial requirements. You can nominate whether you would like the insurer to pay an ongoing annual payment to make sure that they live in the way that they are accustomed.

ANSWERED BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Wayville, South Australia. 

To discuss this further you can email Suresh Rajani at suresh.rajani@taxfirst.com.au or give him a call at 08 8372 7837.