Life insurance pays a lump sum on your death protecting those people who depend on you. It can be used to pay off your mortgage, pay funeral expenses and also leave an income for those left behind. The correct life cover incorporates a terminal illness benefit, which means the insurance can be paid out early if you are diagnosed with a terminal illness and given less than 12 months to live.
In New Zealand 1 in 6 men and 1 in 9 women over 30 will die between the ages of 30 and 65.
While it’s easy to say “that won’t be me”, denying the possibility of premature death is like playing Russian roulette.
Ask yourself:
- If you were diagnosed with a terminal illness and likely to die within a year, how could you ensure quality time with your family before you go?
- Who will pay the funeral expenses?
- Will the family home have to be sold?
- Will your partner/spouse be earning enough to cover regular living expenses?
- What about the things you’d wished for for your kids, such as great holidays and a good education?
Example
Lisa, a 29 year old mum with two children under 10, could only afford trauma cover and life cover. As it turned out, she made a wise choice because a year later she was diagnosed with breast cancer and had to have a double mastectomy. While Lisa was able to claim on her trauma cover, tragically the cancer returned and bought with it a terminal diagnosis.
By claiming the terminal illness benefit on her life cover, Lisa was able to enjoy her final months with her family without the pressure of financial worries and even took them to Disneyland. She died at age 32 knowing their future was financially secure.