If you’re wondering whether or not you should buy life insurance, ask yourself this one question: “Would my death leave anyone in a financial bind?” If you answer “yes”, it may be time to get serious about shopping for life insurance.
Do you need a Financial Cover?
In the exciting journey of life, there will be uncertainties, and these are occasions for you to assume additional responsibilities.
The coveted arrival of a new member in the family, a new mortgage for your dream home, or the milestone of your marriage may all be planned life events, but bring their share of uncertainty.
These are times when you need to be financially prepared so that your family is fully protected, should something unfortunate happen to you.
Careful consideration should be given to the ownership and beneficiary arrangements of any life insurance purchased. You should consult with an insurance adviser or lawyer to coordinate your insurance program, to ensure the life insurance product meets an estate owner’s needs.
Moving in together or getting married is an opportunity to share costs and plans, but it can also bring financial challenges and risks. By planning your finances with your partner you can make sure both your needs are met, and avoid trouble later on. Like all aspects of your relationship, the key is sharing the decision making.
You now have someone in your life to look after and to be looked after in sickness & health.
Having a Baby
Having a baby is an exciting time so you don’t want money worries spoiling things. But the new arrival is likely to mean some big changes to your family finances. With a bit of planning you can keep your finances under control and enjoy all the great things about parenting. There are also plenty more changes ahead as your child grows older or if you have new additions to your family.
Protecting your new family
You may not have seen a need for life insurance before but now is the time to consider it. If you or your partner died, how would your family cope financially?
If you already have life insurance, it’s a good idea to check your policy before your baby is born. You may need to increase it.
Other types of insurance may also be worth considering, such as income protection for the working parent. However this can be expensive so check your budget first.
If you haven’t already, now is the time to make a will or update your existing one. It’s never nice to think about, but it is important to nominate a legal guardian for your child in case you and your partner die. If you have a more complex personal or financial situation – for example you own your own business or are recently separated, you may need to consider other types of asset protection such as a family trust. Start your budget planning now, don’t leave it until the last minute.
Separation or divorce is a stressful and upsetting time. It can also have a big effect on your finances. Taking control of your income, debts and spending can help you get your life back on track. Start by taking stock of your day-to-day finances, then work your way up to tackling longer-term money issues.
Your will, insurance and superannuation
After a relationship break-up you may need to update your will – particularly if you want to change any references to your ex-partner. Find out more about wills.
Your insurance policies may also need updating, especially your life insurance if you have children.
Getting your retirement savings sorted after your relationship ends is an important step in planning for your future. If your partner was taking care of this, you may need to set up your own savings plan.
Note that if either of you contributed to KiwiSaver during your relationship, your savings could be counted as relationship property and will need to be divided along with your other assets.