Working on a rural property keeps you pretty fit and healthy but, even so, no one is sadly immune to illness or death.

As a farmer or property owner you will be used to planning ahead for the seasons. Thinking about what may happen when you are not around is also a part of good rural management – as challenging as it may feel.

Why do I really need life insurance?

As the cost of living goes up, many people may ask why they really need life insurance and whether it is affordable.

It is worthwhile therefore asking yourself the following questions –

• Would your spouse or partner be able to cover your mortgage & finance payments, bills and living expenses if you passed away?  For example, do you have farm machinery debt that would need to be cleared in the event of your death?
• If you died, how would the farm be able to continue running? 
• Do you have a succession plan in place for the ownership of your farm with your children. How will the child taking the farm over pay out their siblings or the surviving spouse for their portion of your estate (the farm)?
• What if your spouse or partner decided they could no longer run the property without you and decided to move elsewhere, how would they fund the purchase of a new home?
• Could you afford to pay the $20,000 average cost of a funeral, burial, or cremation and legal fees?

Life insurance serves as a sort of safety net. It's intended to bring you comfort—the calming knowledge that, in the event of your passing, your loved ones will be taken care of and the ownership of your assets are distributed and owned as you intended. And by "looked after," we mean easing any financial strains that could arise if your income were to be interrupted by an illness, an injury, a disability, or, worst of all, death.

The main goal of life insurance is to protect your family and your business (farm) if you’re not around. If you are diagnosed with a terminal illness and given a prognosis of 12 months or fewer to live, life insurance may also be helpful as the policy will pay out whilst you are alive and you can use your insurance benefits however you like. This money may assist in funding non-funded medical treatments to extend or improve your quality of life, or help you to distribute your assets whilst you are still here.

At a time of considerable emotional stress, such as when someone passes away or is terminally ill,  financial worries can become overwhelming. This particularly happens if you are forced to make big lifestyle adjustments. Having life cover helps put your loved ones in a stronger financial position and creates a sense of security for both you and for them.

To give you an example, take a look at New Zealand celebrity builder John "Cocksy" Cocks' video where he talks about how his life insurance allowed him to make the most of his time before he sadly passed away. 

What are the types of things life insurance can cover?

Here is a high-level overview of some of the options you can select as part of your life cover. These would be worked through with you and your broker to ensure they fit with your personal circumstances.

• Repay the mortgage on the family home.
• Repay other debt. 
  This may include personal loans, credit/store cards, farm debt, farm machinery debt.
• Grieving money. 
  Enables the survivor to have some time off work without having the pressure to rush back to work to pay the bills
• Survivors’ income.  
  This allows income if the person left behind cannot earn any or enough money to support themselves and/or their family (this is common if it’s the main income earner passes away)
• Childcare costs.  
  If the person left behind needs to get back to work, then who will look after the children?  Do you need a nanny?  Do you need after-school care?
• Education costs.  
  You may want to leave money for your children’s education/first house.
• Burial costs.  
  Funerals are costly, we would suggest you allow a minimum of $20,000 to fund burial and legal fees.

Have questions?

Life cover may not be as expensive as you think, and the question always comes back to “can you afford not to have it”?

If you would like to find out more and discuss your situation, contact Gary McCarthy, PGW's Insurance Relationship Manager, and he will be happy to arrange for one of the ICIB Brokerweb representatives to contact you.