{"id":10279,"date":"2022-05-09T07:00:12","date_gmt":"2022-05-08T23:00:12","guid":{"rendered":"https:\/\/www.infinitysolutions.com\/?p=10279"},"modified":"2022-05-27T16:22:12","modified_gmt":"2022-05-27T08:22:12","slug":"protecting-your-wealth-with-life-insurance-four-common-mistakes","status":"publish","type":"post","link":"https:\/\/www.infinitysolutions.com\/blog\/protecting-your-wealth-with-life-insurance-four-common-mistakes\/","title":{"rendered":"Protecting Your Wealth With Life Insurance: Four Common Mistakes"},"content":{"rendered":"

If the last two years have taught us anything, it is that we should expect the unexpected. That\u2019s why life insurance is a key element of a sound financial plan. We take a look at the main mistakes people make when it comes to life insurance. <\/em><\/p>\n

Life insurance mistake number 1: no life insurance<\/strong><\/span><\/h4>\n

This is an absolute no-no. Why? Because if something happens to you, money will be required to cover your debt\/mortgage and everyday living expenses such as utility bills, childcare, education fees etc etc.<\/p>\n

I bet your house and car are insured. And rightly so, they are valuable assets. But you and your ability to earn are far more valuable. If you are 30 years old and earning $50,000 per year, over the next 30 years of your working life you are worth $1.5m, without taking into account likely salary increases and bonuses. That\u2019s probably significantly more than your car is worth!<\/p>\n

Action: If you don\u2019t have life insurance, prioritise putting this in place.<\/p>\n

Life insurance mistake number 2: assuming cover is valid when you relocate<\/strong><\/span><\/h4>\n

It is surprising how many expats assume that the cover they had back home will remain valid once they have relocated abroad. For the vast majority of people this is not the case. If you are moving abroad or have recently located, and have made this assumption, you should contact your insurer as a matter of urgency to clarify the situation. It is more than likely that emigrating will have invalidated your life insurance.<\/p>\n

Action: Check with your existing provider whether your cover is valid and if not, take out a new policy tailored to your new circumstances.<\/p>\n

Life insurance mistake number 3: insufficient cover<\/strong><\/span><\/h4>\n

Many people are underinsured when it comes to life insurance. Requirements change throughout your life in line with your evolving circumstances. Buying a property? Revise your life insurance. Getting married? Revise your life insurance. Having a baby? Revise your life insurance. Insufficient life insurance cover puts your family at financial risk should something unexpected happen to you.<\/p>\n

Action: Take the time to look carefully at your life insurance requirements and if necessary, increase cover.<\/p>\n

Life insurance mistake number 4: only insuring the family breadwinner<\/strong><\/span><\/h4>\n

Families with children often have life insurance for the family breadwinner but fail to insure a stay-at-home parent or part-time caregiver. This is a huge oversight. Couples with children should ensure that both parents have life cover. Let\u2019s not underestimate the value that a parent adds, even if they are not active earners. A 2019 survey by salary.com<\/a> estimated the \u2018market value\u2019 of the work done by a stay-at-home mum (although this could equally apply to a stay-at-home dad) at $162,581.<\/p>\n

Calculating how much life insurance you need<\/strong><\/span><\/h4>\n

If any of the scenarios above apply to you, you\u2019ll need to work out how much life insurance you need. Here\u2019s a handy checklist of expenses that you need to take into account (some may not apply to you):<\/p>\n