We can think of a couple of reasons why you might not want to see a Financial Advisor when buying life insurance:
- Maybe you don’t want to discuss your personal finances with a complete stranger;
- Maybe you think they’re going to pressurise you into buying something you don’t want; or
- Maybe you just want to buy life insurance with the least amount of hassle.
But buying life insurance online has its own set of unique challenges. For instance, are you able to identify whether you may have an Estate Duty problem at death? Or will there be a possible Capital Gains Tax issue? Online solutions are just not able to do this for you, simply because no insurance company wants to be liable for any misconstrued advice.
Buying the wrong type of insurance, and the wrong amount of insurance creates a ton of risk – not only for you but also for your family who will ultimately sit with the problem.
That is why we designed our online cover calculator.
So, right off the bat, we want to emphasise that our online cover calculator doesn’t replace financial advice. But we’d rather you use our calculator than simply guess how much cover you need.
When you open the calculator, you’ll notice that we ask a lot of questions such as:
- Your monthly income?
- Whether you have a home loan or not?
- Whether you have a partner or not?
- Whether you have a child or two or three?
That’s important because we base our assumptions on these questions.
Why we think your monthly income is important
When you pass away, all your monthly expenses fall away. But what happens if you’re in a car accident, become disabled, and can never work again? Those monthly expenses such as water and lights, phone, groceries, and clothing won’t just disappear. Nope, the bills are going to keep rolling in. At the bottom of that page, under living expenses, we’ve provided a slider showing your monthly expenses which you can adjust either to the left (to make those expenses less) or to the right (to make them more). Simply drag the dot until it shows your actual and personal monthly expenses. A monthly income protection benefit is the ideal way to take care of that problem.
Why we think your home loan is important
We’ve also made an estimate on our slider as to what you may owe the bank. You can slide the orange dot either to the left (to make the amount you owe less), or to the right (to make the amount more). Not only have we thought of a bond but also any other debts you might have. Think about it: who does not want to leave their loved ones without a roof over their heads or a car to get around in? Life insurance is the cheapest way to get rid of these debts.
Why we think having enough money for future education costs is important
Having children is a massive responsibility which you might not realise while they’re young. But the older they get, the more they look to you for things like tertiary education. Think about this for a moment: Your child does extremely well at school and one day comes to you and says that he or she wants to become a doctor. Now that could be as much as six years of studying, at anywhere between R70 000 and R100 000 a year in 2019. What do you tell them if you haven’t made some sort of provision for that?
So, what we’ve done is estimated an annual cost based on the age of your child. You’re welcome to change these amounts or even remove them, but we’re hoping that you’ll consider this risk which life insurance can easily solve in the event of your unexpected passing.
Maybe you’ve already settled for an amount of life insurance that you want or which you can afford. That’s fine. But our life insurance calculator is there to get you to think about the various risks which you might not have thought about.
We’ve estimated certain expenses based on your income and dependents. Depending on your personal situation, these assumptions might need to be adjusted by you. Adjust the amounts to reflect your actual situation and simply recalculate the benefits.
Here is a link to our calculator. Try it and let us know if it works for you.
Until next time.
The Wise About Life Team