Life insurance: do you need it and how much is enough?

If there’s one certainty in life, it’s that there are no certainties. While it’s easy to keep putting off big decisions, it’s more prudent to discuss them with your partner or family – especially when it comes to their future financial security.

Life insurance: do you need it and how much is enough?
Photo: Getty Images

Life insurance is one such issue that it can be tempting to leave at the back of your mind. However, in order to best prepare your loved ones for any eventuality, it pays to understand how life insurance policies work. Here, with international insurance broker ASN, we present a brief guide to the main types of coverage available, and how to work out how much you should be covered for. 

Think you need life insurance? Find out how ASN can offer solutions tailored for you 

What kind of life insurance do you need?

Life insurance policies fall into two broad categories, each with their own benefits.

Term life policies: you pay a premium for a set ‘term’ or period of time, such as 10 or 20 years for example. During this time, should you pass away, a set amount of money is paid out to your family. Once the term is up, however, you’ll need to take out a new term life policy if you want to remain covered. With term life policies, you benefit from having more flexibility to easily alter your plans and the amount you pay.

Whole life policies: these policies work by taking part of the premiums you pay each month and investing them, without a set term. This makes the value of your policy grow over time. This value can be reinvested to pay for premiums. Alternatively, you can ‘surrender’ it at a certain point, with a large payout to live on, say on retirement. But this is not a decision to be taken lightly, as this means giving up the policy and the potential death benefit. Whole life policies have the benefit of accumulating far more value over time and ensuring that any payout will cover all costs. 

Planning for your personal circumstances

When looking at the types of life insurance, consider your own individual circumstances. If you’re younger and working overseas, perhaps a term life policy is more appropriate, as your circumstances may change. If you’re older and more established, with a growing family, a whole life policy may better suit your needs. 

Remember, also, that the cost of a policy tends to go up as you get older – especially if you develop new health conditions. It makes sense to discuss the topic with your partner sooner rather than later as part of your joint financial planning.

Through an international insurance broker like ASN, you can find life insurance policies tailored for you and your family’s needs. Benefits include the option of single or joint policies, cover for terminal illness and accidental death, and your choice of currency.

Photo: Getty Images

Learn more about the benefits of life insurance for you and your family with ASN

How much life insurance do I need? 

Once you’ve decided what kind of life insurance policy would suit you better, you’ll then want to work out exactly how much coverage you’ll need – one size definitely does not fit all. To do this, financial experts have come up with the DIME formula to calculate an appropriate level of cover based on four factors: debt, income, mortgage and education.

Debt: this is self-explanatory. Even if something should happen to you, your family will still be responsible for any debts that you may owe. So, grit your teeth and gather your credit card statements and other ongoing bills together and add this amount together. This is the amount that would have to be paid out to settle your debts. Life insurance can ensure that debts and legal fees are handled, supporting your family when they need it most.

Income: the money you make to support yourself and your family each year. You need to make an educated guess as to how long your family would need the equivalent of your salary without you – should you multiply your annual salary by five, ten, or even more?

If you’re married with no children, you might only need five years’ worth of salary to ensure your spouse is taken care of. If you have children, it would be good planning to ensure the amount covers the expenses of raising them up to the age of 18. 

Mortgage: if you’ve got a mortgage, or mortgages, gather the documents or statements together and find the payout amount – that is to say, the amount needed to pay them off completely. If you own properties in multiple countries that use different currencies, remember to do a quick calculation based on the exchange rate and come up with a single figure. 

Education: if you have children – or plan to have children – you may also want to consider the potential cost of higher education. In some countries, it’s free or heavily subsidised. But what if you live elsewhere, might move to a new country or just want to give your child the possibility of studying in the US, for example?

Then figure out the cost of the average degree in the country or countries where they’re likely to study and put that down. You might also want them to receive a private school education – if so, you need to add the fees to your estimated costs too. 

Once you have a total figure from these four factors, you have a good idea of your life insurance need. You may also want to subtract existing savings you could tap for expenses, however, to make sure you’re not over-insured.

Then you can go ahead with taking out your choice of fixed term or whole life policies, knowing that whatever the future holds, your loved ones will be supported, safe and set up for the future. 

Find out more about the comprehensive and flexible solutions ASN offers in partnership with some of the world’s best life insurance providers. Benefits include a single or joint policy and your choice of currency.

For members


EXPLAINED: How to access mental healthcare in Norway 

It is important to be on top of mental health problems and get the help you need when issues emerge. So, how does accessing mental healthcare in Norway work? 

EXPLAINED: How to access mental healthcare in Norway 

It’s never quite clear what life can throw at you, and everyone is susceptible to mental health problems. 

If you begin to struggle with your mental health, accessing help sooner rather than later is considered best practice. 

However, when in another country, it isn’t always clearly signposted where you can access such services. 

In Norway, mental health help can be accessed both privately and through the state. 

Norway’s online digital health portal, helsenorge, categorises mental health problems into three categories. These are minor and short-term difficulties (also referred to as mild issues), short-term but severe difficulties, long-term but mild difficulties (moderate problems) and serious and long-term difficulties (severe issues). 

GPs in Norway can offer treatment for mild or moderate health problems and refer you to a specialist. The GP will contact the mental health services in your area on your behalf. 

This may be an issue as although all members of the National Insurance Scheme can access a GP, there is a shortage of general practitioners in Norway. This means it can be hard to get an appointment in good time, or you may not have a GP and be stuck on a waiting list. 

All municipalities in Norway have several services that can provide treatment and support for people needing mental healthcare. For example, municipalities must employ psychologists within their health and social care services. 

You can learn more about your area’s mental health services by contacting your municipality. Some local authorities will require residents to have a referral from a doctor before accessing the services. 

Access to these services, like access to a GP appointment, can depend a lot on how well-resourced the municipality where you live is. Those with mild and moderate problems may be placed on a waiting list. 

READ ALSO: What do foreigners think of the Norwegian healthcare system?

Those over 16 can also access urgent mental health care (rask psykisk helsehjelp). A referral from a doctor isn’t needed to access these services. The service also has a low threshold and is aimed at helping those with various types of anxiety and mild or moderate depression, sleeping issues and early-stage substance dependency. 

The aim of the scheme is to ensure that patients receive support within one to two weeks. The service is only available in 75 municipalities, though. Some local authorities may have an alternative service. More than half of Norway’s local authorities have a health life centre (frisklivssentral). Some offer help with depression, stress and alcohol problems. 

For those with more serious problems, you may be referred to a hospital or psychiatric outpatient clinic. If you need urgent assistance but cannot contact a GP, you can contact your nearest out-of-hours medical centre (116 117). Some major cities in Norway also have psychiatric casualty clinics.

You may be put on a patient pathway to ensure there is necessary follow-up, and a mental healthcare plan where you are involved in the decision-making process will be devised. 

Given the high level of English proficiency in Norway, you should be able to access mental services in the language if you struggle with Norwegian. 

Private mental health care 

Norway’s state mental health care offer is quite robust. But, one of its most significant issues is that the speed at which you can access services and what is available will differ greatly depending on where you live. 

For some, this will mean long waiting times and an under-resourced local mental health team. Unfortunately, this means that some issues will go untreated for longer and may worsen. 

Going private is also an option. There are several private healthcare providers in Norway which offer GP appointments and more specialised mental healthcare. 

There are also some private therapy and counselling services available in Norway’s biggest cities, where sessions can be taken in English or Norwegian. 

The obvious downside to this is the cost. If you have health benefits through work or a union or private health insurance, it is worth seeing what help you have available.