You may think that only those with dependents need life insurance in case the worst should happen. Death, writing wills and illness are all matters that we don’t necessarily want to think about day to day, but it’s important to consider them as part of our financial planning.
Even if you are single and there’s only you to look after, it’s still important to consider what would happen if you became too ill to continue working. How would you cover your mortgage, bills and other expenses or the adaptation of your home? Let’s take a look.
What life insurance covers
Life insurance is worth considering for those with families or close relatives, since it pays out a lump sum or makes regular payments if you die. It’s tailored to give your dependents financial care if you can no longer provide for them. The amount paid out will reflect the amount of cover you decide to take out. It’s entirely up to you to decide what is covered, so if you’ve got a mortgage, you might want it to cover this.
Cover for single people
But what about those with no dependents, should they still consider life insurance? Actually, if you’re a homeowner, as a single person, the responsibility of paying a mortgage is all down to you. So if you weren’t here anymore, your mortgage provider could seek the rest of what you owe from your estate. This could mean your property would need to be sold and your friends and family would get less from what you leave behind. But if your property is in negative equity, they wouldn’t ever be expected to make up the shortfall.
A life insurance policy could mean that your relatives wouldn’t have to go through this process if the worst should happen so it might be something to consider if you’ve got a mortgage.
Peace of mind for you
And even if life insurance wouldn’t be appropriate because you don’t have any dependents or large amounts of credit, it’s vital to consider how you would protect yourself if you became critically ill and couldn’t go back to work. This is why critical illness cover might be worth considering.
Critical illness would pay you a tax-free lump sum if you stopped earning because of a serious illness or disability. The illnesses covered include types of cancer, heart attack, stroke, and debilitating conditions such as MS (multiple sclerosis) and Parkinson’s. Check with the policy provider to see the full list of illnesses covered before you apply.
Your pay-out could be used towards paying the mortgage or rent, living costs, essential medical equipment or adaptations to your home, so it’s worth considering putting a plan in place.
A monthly plan that’s affordable
If you’re applying for life insurance or critical illness cover, you’ll need to decide on the amount of cover you need. This should reflect your outgoings today and future needs as well. You might find it difficult to know how much cover to take out – that’s why it’s good to discuss matters with an advisor and work out what you can afford. The policy will be based on your present lifestyle habits, reflect your age, family medical history and if you have a present health condition.
At thinkmoney, you can take out critical illness cover as an addition to our life insurance cover. Life cover starts at £5 a month and we’ll find the best policy to suit your needs from a panel of leading insurers in the UK.