Later in life, if your savings and investment plans have been properly worked out and adhered to, you should have a steadily increasing net worth. Eventually, your investments should be large enough to ensure a comfortable life for you and your spouse in the absence of that monthly salary cheque. This would mean that you no longer require life cover.

The reality is that many people, who do have life cover, don?t need it and the ones that need it don?t have it.

Many retired people with no debt or dependents chose to hold onto life cover in order to leave an inheritance for their children. This is not a good idea, because as a result of life expectancies increasing older people will need to save for longer in order to maintain their lifestyle.

When life cover makes no sense at all

As people age, life cover becomes more and more expensive. Often individuals have more life cover in their sixties than they had when they were thirty; this does not make sense at all.

Another pitfall of some life polices is that they will often only pay out one 'benefit'. In other words, if you die before the policy matures, your heirs will receive either the death benefit or the cash value (the greater amount), but not both.

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