The loss of a loved one is an incalculable emotional blow, leaving a void that words cannot fill.
While grief and the sense of loss dominate the immediate aftermath, it’s important to also consider the practical implications, especially when the deceased was a primary provider or contributor to the family’s financial well-being.
The question of “how much is a life worth” may feel uncomfortable, yet it is essential when planning for the financial future of those left behind.
In monetary terms, a person’s value often extends far beyond their current income. It encompasses their ability to earn and provide for the family, their role in repaying a mortgage or other debts, and their capacity to contribute to savings and future investments. For families, losing this financial support can mean struggling to maintain their standard of living, afford education for children, or even meet day-to-day expenses.
Understanding Financial Impact
The financial worth of an individual isn’t just their salary. Consider all future earnings that a person could have generated over their working lifetime. For example, someone earning $100,000 per year with 20 years of expected work remaining represents $2 million in potential income—not including raises, bonuses, or other benefits. In addition, the value of superannuation contributions, investments, and other assets might have grown over time, and the financial gap would become even more significant.
But the cost of losing someone doesn’t stop there. Non-working individuals, such as stay-at-home parents, also provide immense economic value. Their contribution to household management, child-rearing, and other responsibilities often substitutes for paid services like childcare or housekeeping. These contributions need to be recognised and quantified when evaluating the financial impact of their loss.
The Role of Insurance
This is where life insurance and other forms of financial protection become indispensable. By putting appropriate insurance in place, families can ensure their financial stability even in the face of devastating loss. Life insurance policies can cover immediate needs, such as funeral expenses, while also providing ongoing support for mortgage repayments, living costs, and future goals like education funding.
For most people, determining the right amount of coverage requires professional advice. An insurance advisor can help calculate an individual’s economic value based on factors such as current income, outstanding debts, future financial goals, and family responsibilities. This personalised approach ensures that the policy is tailored to the unique needs of the family, providing peace of mind that they will be cared for if the worst happens.
Planning for the Unpredictable
It’s uncomfortable to think about worst-case scenarios, but failing to plan for them can have catastrophic consequences. Taking the time to evaluate a person’s financial worth and securing adequate insurance coverage is an act of love and responsibility. It demonstrates foresight and ensures that the financial burden does not compound an already overwhelming emotional loss.
Ultimately, while no amount of money can replace the presence and love of a person, financial planning can protect families from hardship. By understanding the monetary value of life, individuals can make informed decisions to safeguard their family’s future. It’s a way to honour their contributions and ensure their legacy lives on, even in their absence.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
(Feedsy Exclusive)
