It can be scary to consider that we’re might not be around forever, particularly when we have kids that rely on us. The idea that one day we may not be able to take care of our loved ones is intimidating.
Being prepared for this eventuality is incredibly important. In the UK alone, around 28 million people have not taken out a life insurance policy. There are numerous reasons for this – complacency perhaps (sadly) being one of them. Personally, I think the main reason is that it can be exceptionally confusing to establish exactly what you are looking for, and more importantly, what you actually need.
Life insurance can be found online easily enough from companies such as Endsleigh. One kind of life insurance, often referred to as ‘Term Insurance’, is probably the most well known. It’s valid strictly for a certain term that is determined when you take out the policy. Typically, this is a policy taken out by those with dependents (such as new parents) and those with outstanding debts owed. Usually this type of coverage will pay a set lump sum if you (or your spouse) pass away, but there are a number of factors that could impact how it’s set up, including when you take the policy out.
One of the things I think new parents worry about most is outstanding mortgage (house) payments. It’s hard enough to think of running the house on your own if your partner passes away, but even more stressful to try to figure out how to afford to keep the roof over your head if you suddenly lose your partner’s income. Some of that stress can be alleviated with another branch of life insurance – Mortgage Protection Insurance. You can take out this type of policy for an agreed term, which typically would be the duration of the mortgage itself. Dying within this term would mean the policy pays out the agreed amount, however, if you live for longer than this term the policy will not pay out.
Another type of insurance is ‘Whole of Life Insurance’ and it fulfills the same role as term insurance, except that it does not expire and is valid for your entire lifetime with a guaranteed payout. The premiums for this type of policy are generally very high because it has the highest level of coverage, so it's always worth additional consideration and perhaps even consultation to see if you really do need this extra level of protection.
Have You Thought About Life Insurance?
This post brought to you by Endsleigh.