When it comes to financial planning, the need for various types of insurance is a hotly debated topic – something that’s particularly true of life insurance, which some may see as being reserved for the affluent. But, whilst it’s true that in theory, if money is no object then it should be an obvious investment to make to protect your family should the worst occur, there are still large numbers of wealthy individuals without policies.
While some view it as a necessity, for others, it’s a luxury – not because they can’t afford it, but because the fortunes they have amassed are so sizeable that they consider their families already set to be well looked after in the event of their passing.
So, is life insurance an essential safeguard for the future, or is it a luxury some affluent families can do without? We asked the experts at Pure Cover to share their thoughts.
The foundation of financial security
Inheritance tax and contested wills are amongst just some of the things that can impact upon just how much of your wealth is passed onto your family should the worst occur, and it isn’t always as much as you’d think. With this in mind, many are opting for the belt-and-braces approach to ensure their families are looked after financially in such a scenario, and life insurance provides a vital safety net. It’s understandable if you’d rather not think about such a situation occurring, but it could prove far costlier to those you love later on if you don’t take out a policy sooner, rather than later. It might incur a premium, but it’s a small price to pay for peace of mind.
Protecting those who matter
Providing a financial cushion for your family in the event of your untimely demise won’t make up for the loss of you, but it will offer some comfort at a difficult time and ensure that anxiety over the reading of the will and any potential outcomes are kept to a minimum. Your spouse, children and any other dependents will be able to maintain their quality of life despite the potential sudden loss of a sizeable income, particularly if you’re the primary breadwinner. Plus, a good policy will provide enough to cover childrens’ education without the need to dip into their trust funds or any other savings you have set aside for them.
Planning for the unexpected
No matter how hard you might try, it’s impossible to see the twists and turns that life has in store for you, which is why planning for the unexpected is key. A financial contingency plan for occurrences such as illness, accidents – and in this case, even death – will ensure that your family is never left high and dry, and will give you the peace of mind that you’ve done all you can to ensure they are provided for. Worrying about such things in times of deteriorating health is the last thing you need should you become terminally ill – and while again, it’s not a nice thing to think about, and indeed, might not happen in such a way, it’s another eventuality in which you’ll find yourself thanking your past self for being one step ahead.
Business continuity
If you’re an entrepreneur or a business owner, then there’s an additional reason to consider taking out life insurance. A key person insurance policy will guarantee that if a company’s owner or an important key employee passes away, business operations will be able to continue in the same way, making it simpler to navigate the transitional period that will follow and prevent financial strain. As well as ensuring your business remains operational, you’ll be protecting your employees’ livelihoods, and making sure that one of the most valuable assets you have to leave to family members is protected.
Luxury or necessity?
So, with all of this in mind – is life insurance really a luxury, or is it, in fact, an essential? For many, the answer would be the latter. There are a plethora of different life insurance policies on the market today, designed to meet a diverse array of needs, so if it’s an item that is continuously falling further down your to-do list, then take this as your sign to set some time aside and do some research. Life insurance is a practical tool that everyone could benefit from having, and it pays to act now, rather than leaving it until it’s too late.
