Life insurance

Reasons To Have Life Insurance

As the old saying goes, nothing is certain – except death and taxes. Most insurances are in place to protect against something that could happen – however we can guarantee death will happen to us all – making it the most important insurance you buy.

Reasons to buy life insurance

There are many reasons to buy life insurance – whether you do or don’t have health issues. Naturally, if you do have health issues it makes sense to take out a policy, but even if you don’t it’s wise to look into it early. Policies could be better value the younger and healthier you are. Provided you have dependents, a partner who needs your income or a mortgaged property, life insurance is a must-have. With life insurance you can:

Cover the loss of income

The loss of a partner, particularly if it’s unexpected, can have a huge impact on a household income, to the point where the other partner may not be able to cope. Many may struggle to cover the mortgage, let alone day-to-day living costs, especially with children.

Pay funeral bills

These things can feel morbid to think about, but it’s important to consider how your family might pay for a funeral. The cost of a funeral can reach over £4000 which can be a large expense for a family, especially when faced with a loss of income and not to mention the loss of a loved one.

Pay off any debts

If you were to pass away without settling your debts, these would be paid out from your estate before your family receives anything you’ve left behind. A lump sum payment upon your death to cover anything outstanding means your family can make the most of what you leave them.

Make sure your children are well catered for

Should you have children, particularly those that still live at home, then life insurance is even more important. Ensuring they’re

Critical illness cover

Income protection

There are different types of term life insurance depending on your situation:

Level term policy

This policy will pay the same amount throughout the entire term unless you change it during that time. With this policy, you will know exactly what your family will be left with in the event of your death.

Increasing term policy

An increasing term policy factors in the rising cost of living. Any money paid out will be in line with the Retail Prices Index (RPI), ensuring that the money insured holds is real value throughout the term. However, as the amount insured rises over time, so will the premiums in line with this. Therefore, if you decide this policy is right for you, you should be prepared to pay more as time goes on.

Decreasing term policy

Decreasing term insurance is designed to cover a debt that will gradually reduce over time, such as a mortgage. With this type of insurance, your monthly payments will stay the same, but the overall mortgage debt will decrease. The amount that the insurance company will pay out will also decrease to reflect the remaining debt on your mortgage.

How much does life insurance cost?

The cost of life insurance depends on a number of factors including the policy you take out as well as your age, lifestyle and medical history. So if you are young, active and healthy then, in general, you will pay less for life insurance than someone who is older or someone who has a life-long medical condition.

A man and woman hold the hands of their child and walk along a path after buying life insurance

Reasons to buy life insurance

There are many reasons to buy life insurance – whether you do or don’t have health issues. Naturally, if you do have any health problems then it makes sense to take out a policy, but even if you don’t it’s wise to look into it early. Policies could be better value the younger and healthier you are. Provided you have dependents, a partner who needs your income or a mortgaged property, life insurance is a must-have.

With life insurance you can:

1. Cover the loss of income

The loss of a partner, particularly if it’s unexpected, can have a huge impact on a household income, to the point where the other partner may not be able to cope. Many may struggle to cover the mortgage, let alone day-to-day living costs, especially with children. Life insurance will pay out in the event of your death, ensuring that your family are able to cope financially without your income.

2. Pay funeral bills

These things can feel morbid to think about, but it’s important to consider how your family might pay for a funeral. The cost of a funeral can reach over £4000 which can be a large expense for a family, especially when faced with a loss of income and not to mention the loss of a loved one. Life insurance can be used to help cover this cost, so your family have one less thing to worry about at an overwhelming time.

3. Pay off any debts

If you were to pass away without settling your debts, these would be paid out from your estate before your family receives anything you’ve left behind. Depending on your level of debt, this can mean that your family could receive nothing or very little if you don’t have life insurance. This can mean it’s even more important to consider a life insurance policy if you have any debts so that your family can make the most of what you leave them.

4. Make sure your children are well cared for

Should you have children, particularly those that still live at home, life insurance is even more important. Your main priority will be to ensure that your children are well looked after in the untimely event of your death. Taking out life insurance will make sure that your children have financial support when you’re no longer there.

5. Bring peace of mind

None of us knows what the future holds. You might be lucky enough to live another 50 years or you might, unfortunately, pass away tomorrow. This is why it’s best to prepare yourself for any possible eventuality. Although money cannot replace a loved one, it can help to make life easier for the people you leave behind.