There are many important considerations when deciding whether or not to take out life insurance. It might be the case that your husband/wife or children rely on your income to pay for the mortgage or other costly expenses. If this is the case, it’s likely that you’ll feel you need life cover to support your family when you can’t anymore.
So what is life insurance?
Life insurance is there to support your relatives if you die. This is delivered either in stages or all in one go. The idea is to give you the peace of mind that if you aren’t able to provide for your family, they will have the funds to be able to support themselves. The total amount depends on the type of life cover that is taken out.
There are two main policies:
Term life insurance policies – These are for a fixed period such as 5, 10 or 25 years. This insurance plan pays out if you die during the policy and a large sum of money isn’t available at the end.
Whole of life policies – These policies pay out any time that you die
What is not included in the policy?
- Illness or disability – only if you die
- Many policies exclude death due to drugs or alcohol
- A pre-existing health issue might be excluded
Why do I need it?
You should probably consider taking out life insurance if you are in the following circumstances:
- Children who are dependant
- You have a partner who’s dependant
- You pay your family’s mortgage
An important consideration is about the cost of a funeral. Its often a good idea to take out a policy which will cover your funeral costs. More broadly, life insurance is essential to financially provide for your family when you die.
I’m single, do I need life insurance?
It isn’t necessary to have life insurance.
My partner is the main earner, do I need life insurance?
It might be the case that your partner earns the most and they can easily support the household after your death – in this case it might not be necessary. However, it might be worth saving a chunk of money for the cost of your funeral.
What does Life Insurance cost?
It’s possible to find very affordable life cover policies. Subject to circumstances, it’s possible to find very manageable rates.
The cost depends on a number of factors. Below are some of the key points which are considered:
- Health Condition
- Smoking Habit
- Type of policy
- Lump sum payout required
Already have life insurance with your employer?
If your employer is providing you with a package consisting of a “death in service” term then you might not require another policy.
It’s down to the individual whether you feel your current policy will cover your requirements. It’s worth considering what would happen if you stopped working for your employer and these benefits halted.