Why would I need life insurance?

Why would I need life insurance?

The need for life insurance nearly always coincides with one of life’s momentous moments, like falling in love, buying a house, having a baby or starting a business. Why? Because these are times that demand a higher level of responsibility. Life has stepped up, and you’re stepping up to meet it.

A life insurance policy is something of a security blanket. It’s designed to give you comfort; the reassuring feeling of knowing your nearest and dearest can be looked after, should something happen to you. And by looked after, we mean reducing any financial pressures that may come if your income stops due to injury, sickness or disability or worst of all, you were to die.

Here’s a quick rundown of the life events and situations that may prompt you to make an appointment with a financial adviser who can advise on the life insurance you may need and set up your policy, so it pays out to the people you want it to.

If you’re sharing a mortgage with someone.

If you’re part-owner of a house or apartment and it was purchased with a home loan, life insurance is a way to protect the co-owner if you were to die. For example, a life cover payment could pay a lump sum that the remaining owner can use to repay some or all of the remaining loan.

You might be living together in the property, as life partners or friends, or it could be an investment property. Either way, having life insurance can protect your partner financially, if you were to pass away.

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If you’re getting hitched (married or civil union).

Marriage, civil unions and living together are usually all about sharing everything, including the responsibility of looking after each other. If something happened to you, would your other half be OK for money? And vice versa.

For long-term couples, life insurance provides peace of mind that ‘til death do we part’ doesn’t mean the surviving person finds themselves stranded financially.

Even if you don’t yet own a house together, there might be other shared responsibilities that need to be considered. Maybe you borrowed money for a car, have credit card debt, or are paying off furniture and appliances. If something happened to one of you, life cover can provide the other person with a lump sum of money to help with ongoing or future costs.

If you’re supporting your parents or other family members.

When the going gets tough, families like to help each other out. So it’s possible your income is helping to support siblings, parents, or nieces and nephews, whether they’re living with you or somewhere else. Life cover can provide these people with a lump sum of money to support with daily living costs.

If you’re having a baby.

If you’re thinking about having a baby in the next year or so, or there’s one already on the way, you and your partner may want to have life insurance to ensure there’s some financial protection if something happened to either of you. Nobody likes to think about not being there to care for and support their children, however balancing risk is a task that comes with the parenting role. It’s about thinking of the ‘what ifs’ that could affect your children’s future.

If you’re injured, sick or disabled and can’t earn.

If illness or injury affects the household income, having some kind of life insurance could lighten the financial load. You may consider Trauma cover, also known as critical illness insurance; Income protection cover, to pay a monthly income; Total and permanent disability cover, which pays a lump sum when the insured person is totally and permanently disabled; or monthly mortgage repayment, that could cover home loan or rent repayments.

Getting life insurance of some kind might be even more important if you’re a solo parent. It can be part of a backup plan for your child’s future, which may also include consideration of other things such as guardianship arrangements or making a will.

If you’re going into business.

Whether you’re pursuing an amazing business idea, joining an existing business, or striking out on your own in a professional field you know well, there might be an investment or loan involved.

Getting a specific kind of life insurance for business helps to protect you and yours in several ways:

  • If you die or get a terminal illness diagnosis, a payout can help the business to stay afloat without you.
  • If you took out a personal loan to buy into or establish a business, money from a life insurance claim could help to ensure your wife/husband/life partner can pay the loan back.

Ready to find out more? Get in touch.


If you got a serious illness or disability.

Another kind of life insurance is trauma cover, a type of protection that can ease some of the financial impact if you’re diagnosed with a serious illness or disability. Fidelity Life’s Trauma cover applies to more than 40 serious health conditions and circumstances, from heart attack all the way to becoming deaf or blind. See the full list of conditions and note that a specified definition in the policy wording must be met in order to receive payment. With a trauma cover payout, you get to decide how to spend the money to support whatever you need. It can be used for medical expenses or rehabilitation costs, changes required to your house connected with your injury or disability or living expenses.

For financial advice, including a needs analysis to identify the type of cover that could be right for you, find a financial adviser.


DISCLAIMER: The information contained in this article is a summary of the key points of the insurance cover(s) mentioned and is general in nature. This article does not constitute a financial advice service. All covers are subject to the definitions, standard exclusions/limitations, terms and conditions contained in the full policy documentation which is available from Fidelity Life or your financial adviser who holds a Distribution Agreement with Fidelity Life. All applications for cover are subject to underwriting criteria.

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