Savings lever #1: Precise and honest advice
Life insurance is one of the most important things you can buy. It provides a security blanket for your loved ones, protecting them against the financial burden that would arise if anything were to happen to you. But unlike some of the other purchases that you make, the decision is not as simple as ‘should I buy life insurance’ or ‘should I not buy life insurance’.
Figuring out ‘how much you need’ and ‘how long you need it for’ can have a big impact on the price of your life insurance policy. Unfortunately, the life insurance industry has adopted a rather unsophisticated approach to answer these questions. They call it the “10 times income rule”, and it simply multiplies your income by 10 and adds on your mortgage Seem basic and archaic? We couldn’t agree more!
The purpose of life insurance protection is not to replace all the future income that would be lost if you were to pass. It is to make sure your family has enough money to cover their day-to-day expenses and pay off their debts. But calculating that number is no easy task, and the “10 times income rule” fails to live up to the challenge, ignoring key factors like your household make-up, your partner’s income, your savings, your spending patterns and your existing life insurance policies already in place.
So we decided to tap into 21st century technology and build a sophisticated life insurance checkup to do just that. We take a detailed look at your family’s needs and use advanced statistical techniques, built on a foundation of honesty, to create an accurate picture of your life insurance needs.