Do I need life insurance?
Published 11 October 2016 by Kyri Levendi
Your circumstances are likely to determine whether you'll need life insurance.
As you go through life, there are a number of milestones you might reach. You might have just moved into your first place, married your partner or been given that long-sought after promotion at work. The more responsibilities you have, the more likely you are to think about what's going to happen after you're gone.
Life insurance – cover which pays out a lump sum or monthly income if you die – can help provide for your loved ones after your death. Not sure whether you need life insurance? We take you through who should think about getting cover.
If you're the main breadwinner in your household – so your partner or children rely solely on your earnings – then life insurance can be an essential purchase. Without it, your loved ones might not be able to keep up with the mortgage or rental payments, or any other household bills that your income normally covers.
A life insurance policy could help take care of some of these costs and could even go towards paying for your funeral.
Are you and your partner both employed? If so, you might not think that you need life insurance if you're both earning. But you need to think about how the other person would cope on just one income.
If they don't currently earn enough to support the household and wouldn't want to change their current lifestyle, then it could be worth looking into individual separate policies or joint life insurance.
Think about all that you do as a stay-at-home parent – the school run, child minding and a large proportion of the household chores. You might not physically be bringing any money in, but your absence would have a huge financial impact on your family.
If your partner was unable to give up work, then someone would have to continue doing your daily tasks – would they be able to afford a childminder or someone to clean your home? If the answer to both of these questions is no, then you should consider taking out life insurance cover.
The key to knowing whether you need life insurance is if you have dependents (people that rely on your income) such as a child or partner. If you are single with no dependents, then it's probably an unnecessary expense that you don't need.
The same can be said if you are elderly and your children are financially stable. Remember though, life insurance can help to cover funeral costs or to pay an inheritance tax bill so it can be worth looking into.
If you're a single parent, life insurance could help provide for your child if their other parent is unable to do so.
Getting a policy
Thinking about getting life insurance? While this won't make up for your family's loss, it will mean they get the financial support they might need.