Life insurance, how much do we need?

No good financial plan is complete without a robust insurance package that takes care of things when we need it to.

Getting the right balance is the domain of professional insurance advisers who are qualified and knowledgeable in formulating just the right package to suit your individual requirements with enough to cover you without breaking the budget and it’s important to review it annually.

Most advisers these days will have access to comparative software that can compare provider rates and benefits and come up with the right solution and they all have to be Licensed Financial Advisers registered with the Financial Markets Authority operating to standards of professional conduct, skill and competency. Gone are the days of just fitting you out with any old product, it’s all about consultative process these days.

While there are many aspects to insurance, life insurance is typically the staple with other facilities such as mortgage and income protection attached as part of a package.

How much we need depends on individual responsibilities, size of mortgages and other lending and how much we want to leave to set up our family in the event the breadwinner is no longer with us factoring things like savings and income producing investments in place or it may be to provide enough to replace an income each year until the youngest turns 18 for example, it’s totally individual.

For some it may be $500k and others $2m or more and those with no dependants or mortgages it could be hardly anything or even none. What we do know however is the younger you start and the better the health the cheaper it is and it can be a case of locking in rates now for future insurability requirements.

So if not in the last year, arrange a free consultation with your insurance adviser and review what you currently have to ensure its still fit for purpose.

For more on the above, go to www.infinance.co.nz/insights.

Commentary is general in nature and not to be considered financial advice. Written by Brian Coogan, Licensed Financial Adviser and Director at Infinance – Taupo.

“Insurance – It’s better to have it and not need it than need it and not have it” – George Ellis