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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.

EXPATS

For internationals, ‘reliance on social media is sometimes greater because we are more disconnected’

Over-reliance on social media can cause stress and loneliness, and is a particularly easy trap to fall into for those dealing with life in a new country, writes psychologist and The Local guest columnist Edita Petojevic.

For internationals, 'reliance on social media is sometimes greater because we are more disconnected'
If you're already feeling isolated, reliance on social media can make things seem worse. File photo: AP Photo/Jessica Hill/Ritzau Scanpix

Do you go about your day feeling overwhelmed by thoughts? Do you catch yourself feeling constant high level of anxiety, without being able to shake it off? Do you struggle to stay grounded in the here and now?

If you’ve answered yes to the questions above, know that you are not alone. The period we live in makes it difficult to stay still for any length of time, not to mention quieting the noise inside of us. We are constantly bombarded with information that creates pressure to keep up and that interrupts our focus on more meaningful things.

The fast-paced lifestyle, however, doesn't allow for deeper reflection. Instead it pushes us to scroll through feeds on our phones mindlessly. There is a near constant pressure to stay informed and updated, and a fear of missing out (FOMO) when we try to put our phones away.

As a psychotherapist based in Copenhagen who mostly sees internationals, I have spoken with many clients who experience these difficulties. The virtual world that we spend so much time in is causing people stress and loneliness, and often the very sense of disconnectedness we seek to avoid.

The purpose with this article is to bring awareness to the correlation between the digital world and mental health issues.

Moving towards good mental health requires that one is in touch with one’s own physical, emotional and intellectual needs. It doesn't necessarily mean that these needs are always met, but it indicates an awareness of them and an intention to meet them. This means tuning in to and striving towards taking care of oneself.

We live much of our lives in a digital world where the focus is on external validation. For instance, when you see something you want to take a picture of, it is less about engaging the subject and remembering, and instead is all about showing and sharing. The need to be seen by others and to share with others is immense and it forces an unhealthy focus on external validation.

Sharing with others has become more important than taking time to nurture ourselves. The focus is on informing the external world rather than being present and enjoying the moment.

You might be asking yourself, ‘Why can't we do both?’ Here's where the true dilemma lies.

When we try to think about who's liking our post or whether we received that email, while at the same time trying to be grounded in the present, we wind up with only a superficial level of attention on any one thing. Furthermore, due to splitting between thoughts and states, we seldom get to be in the moment and never truly allow ourselves to relax.

READ ALSO: The link between international relocation and depression

Katarina Gospic, one of the leading brain scientists in Sweden, explains it well by talking about the need to check our phones as a natural part of a system of rewards. Our brains are seeking the reward we get every time we get a like, a positive comment or anything that makes us feel good in the moment. It's an instant reward, an external validation that we are liked and okay in the world. However, these rewards are short-lived, so we keep checking our phones, hoping to receive another positive reassurance, again and again. 

It's all part of an “intermittent reward system”, as Gospic so well explains it. 

In my therapy practice, I have noticed that the number of clients who rely on their phone for repeated daily rewards is growing. As mentioned above, my clients are primarily internationals living in Denmark, and this appears to be making their over-use of social media even worse. Our reliance on social media for comfort and validation is sometimes even greater because we are often more disconnected. The outcome, however, is the opposite. Our clients report feeling more isolated, depressed and anxious when seeking connection in these ways. 

In treating clients with an overuse of social media, we gradually expose them to whatever might be difficult for the client. In this case, we create a treatment plan that helps clients engage more with people in person, and spend less time seeking the short-term rewards on their phones.

We have noticed a direct link between the use of the phone and avoidance behavior. The more we avoid engaging in real life, the more we retreat to the use of the phone, which results in more negative feelings.

In fact, the use of the phone resembles the use of alcohol and drugs in the sense that we use it to get an instant reward and to escape the reality we are in. This explains why more and more digital detox camps are being set up all over the world.

Another part of this reward system is the thinking process behind it. Every day we hear our clients share how they compare themselves to others on social media and the pressure they feel to meet the social expectations of good looks and successful lives. For some, there is a constant race to become better, prettier, and more successful, and those who don't pause to reflect get caught up in trying to meet these impossible and imaginary goals, slowly but surely moving the focus from thinking about what is important to us, and instead buying into the ideals we see around us.

 
 
 

 
 
 
 
 

 
 

 
 
 

 
 

A post shared by Copenhagen Travel Guide (@travel2copenhagen) on Nov 8, 2018 at 3:21pm PST

Furthermore, the virtual world often presents filtered versions, where the majority focuses on sharing only the most beautiful and most successful parts of life, leaving many who already have low self-esteem to become ever more insecure and stressed.

For some, it even leads to comparison and competition rather than sharing in other’s happiness or good fortune.

Externally, we are chasing to get more and internally we have never been lonelier.

READ ALSO: OPINION: A foreigner's attitude hacks for transitioning to life in Denmark

What can be done?

We have more ways to connect and communicate than ever before, yet we have never been more disconnected. The need to be heard, truly and deeply is huge. So, how do we get back to our true selves? Is there a way to find a balance between the external and the internal world? We believe there is. If you have read up to this point, you might be one of those who realizes the problem but lacks the tools to change the current state. If so, you are off to a good start.

Here are some specific steps you can take to begin finding the balance you need:

  • Awareness is the first step. Before we can make any changes, we need to acknowledge the problem.

  • Secondly, write down your individual needs. Try to make time for every single one of them during your week. Talk to your partner or friends or anyone who you trust about this process. Change can be hard as it requires you to challenge old ways of thinking and to step out from your comfort zone. Sharing with someone allows you to get support and to hear your own thoughts and feelings.

  • Limit the time you spend on your phone. For this, consider using one of the apps that reports back to you how much time and what you have used it on. Then set achievable goals.

  • Try to use the phone with intention rather than for mindless scrolling. Have set phone times and stick to those boundaries.

  • Spending less time in the virtual world will lead to more time in real life. Think of the things you have wanted to do for a long time but didn’t have time to do. Here is your chance! Read, study philosophy or astronomy, explore your local environment, develop new friendships, attend evening classes, learn to meditate.

  • Pay attention to all the things you get done when you limit the time on your phone and notice the effects it has on your mental health. Notice how you feel.

  • Evaluate before and after. Write down the results gained from restricted phone use and more time spent on your personal needs. This can be done as soon as a week after you start out.

One of our most profound findings from restricting phone use is a more peaceful everyday life. Freeing yourself from the need of external rewards allows you to get in touch with your internal needs. Once you become aware of your needs, you will also start thinking of ways to meet them. This opens the door for healthy habits such as physical activity, meditation, reading, playing and so on. 

We’ve also noticed a sense of regaining control over daily life once these boundaries were implemented. Our clients report a feeling of freedom to plan their days and follow through with activities, rather than getting sucked into talking or scrolling on the phone. There was an overall increase in satisfaction with the time spent.

To conclude, we would say that by not escaping reality, we are given the chance to notice what is going on around us, and to begin to more readily face some of the many challenges many internationals face when starting life in a new place.

Edita Petojevic has lived outside of her home country for most of her life. She received a B.A. in psychology from Jacksonville University in Florida, United States and an M.A. in Integrative Psychotherapy and Counselling from Roehampton University in London. She sees clients in English and Swedish at the MacFarlane Psychology Group, a Copenhagen practice offering psychotherapy for internationals.

READ ALSO: Why moving to Denmark can cause feelings of loneliness – and what you can do to feel better