It's a completely natural, completely human tendency not to focus on the worst that might happen in our lives. Most of us take some version of David Sarnoff's advice, that "We cannot banish dangers, but we can banish fears. We must not demean life by standing in awe of death".
There are plenty of events less tragic than death, but disastrous nonetheless... and until it occurs, we almost always think that it could never happen to us. Australians are one of the most underinsured nations in the world... it seems that we are better than most at believing in our invincibility! At the same time, though, we know logically that there are substantial odds of something very difficult happening in our lives at some point. When it does, we look at the various ways you might financially cope with that, from the gold standard of income protection insurance, to various after-the-fact methods.
Income Protection Insurance If you are unable to work due to illness or injury, income protection insurance is the 'gold standard' coping strategy for ensuring that your entire life doesn't go down the tubes because of it. Income protection insurance will replace up to 75% of your income, for up to the rest of your working years, or as specified by your benefit period. Savings are quickly exhausted, government benefits are quite modest... but income protection insurance allows you to keep living your life with only minor modifications.
This is especially important if you haven't already paid these in advance. Make sure you include the direct funeral costs, any uncovered medical costs, and of course any estate related costs (including lawyer fees). Besides that, you also want to ensure you account for outstanding debts and mortgage balance. Once you add up all of these costs you will have a good idea of what you will need to cover your IMMEDIATE costs. This is not all you have to account for though...
More time spent on your business Small businesses are more susceptible to losses if any of the key employees leave the business, whether due to disability or death. This explains why most start-up businesses are encouraged to invest in a good business insurance package.
However, having a small sole proprietorship or partnership enterprise can be demanding of your time and attention. This leaves you with very little time to research and select a good insurance package. By utilizing the services of a business life insurance agent, however, you don't have to do all the dirty work yourself. An agent well-versed in business insurance and key man insurance can explain everything you need to know about getting your company insured, at rates you can well afford.
Easy compilation of requirements Prior to the processing of your business insurance application, you will need to submit a complete set of documents. Failing to complete the requirements, which may include health and lifestyle details on your key employees, could very well result in your application being sent back, or denial of coverage. If you're working with a trusted agent, he or she can review all the documents pertinent to the application, ensuring that you receive the policy you prefer at the best terms.
If you consider all of these factor's it should allow you to make an educated choice on how much insurance you need. You will ensure your family will be taken care of, as well as make sure you aren't overpaying on your life insurance. If you are still confused about how much you need exactly, then sit down with your insurance broker and you guys can work out a specific life insurance quote. Good luck, and remember, being prepared is the best way to protect your family.
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Orignal From: How Much Coverage Is Enough? - Life Insurance
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