Life insurance is not for you. It is for whoever you leave behind.
If nobody would struggle financially without you, you may not need it. If somebody would, the amount has to be calculated rather than guessed.
Setting the sum assured
Too little and the policy feels pointless when it is finally needed. Too much and the premium strains the monthly budget until the policy lapses halfway through. Both fail.
The approach I use adds four components, then subtracts what you already hold:
- Income replacement. Household running costs multiplied by the number of years the family needs to stay supported.
- Education funding. Costs to the level you are targeting, for each child you still support.
- Debt settlement. Mortgage, personal loans, vehicle finance and business debt that would pass to your heirs.
- Final and transition costs. Funeral, estate administration, and a buffer while the family reorganises its finances.
There is a calculator on the home page that runs this arithmetic. It is rough, and it is a thinking tool rather than a financial recommendation, but it gives you the order of magnitude.
Pure protection or investment-linked?
This is the question most often answered dishonestly in this industry, so let me answer it plainly.
Unit-link products combine life cover with allocation into investment sub-funds. Part of the premium goes to the cost of insurance and other charges; the remainder is invested. The investment value is not guaranteed — it can rise or fall, and past performance does not indicate future results.
For some people that structure suits, because it is convenient and enforces discipline. For others, separating protection from investment gives clearer costs and more freedom. What I will do is show you the cost structure of both so you can decide. I will not give you return projections, and I am not a licensed investment adviser.
What follows is a summary written for general understanding. The benefits, annual limits, waiting periods and exclusions that actually bind are those in the Policy and the official illustration issued by Allianz, and cover is always subject to underwriting.
Riders usually worth the money
| Rider | What it does | Worth knowing |
|---|---|---|
| Critical illness | Cash benefit on diagnosis of a condition listed in the policy. | This money replaces income lost during treatment — something health insurance does not do. |
| Premium waiver | Premiums are waived if the policyholder is diagnosed with certain conditions or becomes permanently disabled. | Frequently overlooked, yet it is what keeps the policy alive precisely when income stops. |
| Personal accident | Additional benefit for accident-related risk. | Relatively cheap. Relevant if you are often on the road or work in the field. |
| Additional life cover | Increases the sum assured without issuing a new policy. | Useful when needs grow, for instance after taking a mortgage or having a child. |
Rider availability, condition definitions and waiting periods differ by product and follow the terms of the Policy.
When to review the figure
The right sum assured five years ago may not be right now. Revisit it when you:
- Marry, or have a child
- Take a mortgage or long-term business loan
- See a significant change in income, up or down
- Take on a new dependant, including a parent
- See your youngest finish university — this often means cover can be reduced
Calculate first, discuss products second
The needs analysis always precedes the plan discussion. Doing it the other way round is the most common way to buy the wrong cover.