Life insurance – the cover you can get which pays out a lump sum or a monthly income if you die – can be a really useful policy in certain circumstances. It means your family won’t have to be saddled with a financial burden if the worst should happen.
But do you really need life insurance or would it be a waste of money? It really depends on where you’re up to in your life and what your own individual situation is. Let’s take a look at who should consider covering themselves with a life insurance policy.
1) You’ve got dependents
If you’ve got kids or someone else who relies on your income – a partner who doesn’t work, for example – life insurance could be a good idea for you. While there are some benefits available, like Widowed Parent’s Allowance, this probably won’t be enough to cover the full amount of your income, and you partner would likely have to get a job or take on extra hours. That’s why life insurance could be worth considering, as it can replace what you earn if you aren’t around anymore.
2) You have a mortgage
If you’re a homeowner, you and your family may rely on what you earn to cover the mortgage payments every month. If you take out a life insurance policy to cover outstanding amount of your mortgage you’ll have the security of knowing that, if the worst does happen, the mortgage would be paid off and your family could continue to live in their home.
3) You’ve not got any savings
Just because you don’t own your home and you’ve got no kids doesn’t mean you shouldn’t still consider a life insurance policy. You might not think you’ll need it as your partner will be able to cope financially on their own without you but if you’ve got no savings, it could still be worth thinking about taking out life insurance. Your partner would have to cover all of your funeral costs alone and while they may be able to claim Funeral Payments support if they claim certain benefits, they won’t necessarily be eligible for this. A life insurance policy would ensure they wouldn’t have to cover any financial obligations once you were gone.
Life insurance doesn’t need to be expensive – it can cost as little as a few pounds a month, depending on much cover you want. This could be a small price to pay for the peace of mind of knowing that your loved ones would be free from any financial problems. Of course, money won’t replace a person, but it could help them cope with this difficult time by taking one less stress off their shoulders.