It may not seem like the obvious gift but the decision to buy life insurance or life assurance as it is also referred to could be one of the most important decisions your ever make.
I’m sure you will have seen thousands of advertisements telling you to compare life insurance but have you actually stopped to think of the consequences of not having some form of life cover in place?
Just think for a minute about the consequences of you not being around anymore. The loss would be hard enough for your family but the loss of your income could have a devastating, possibly life changing effect on those you leave behind.
People compare life insurance for a number of reasons and at any age. These reasons vary though as our requirements change the older we get, which is why there are different types of life insurance on offer.
To help you decide if you should be taking time to make a life insurance comparison, here are some examples of why people buy life cover:
Single Income Family
Whether you are a single parent, the main breadwinner or perhaps you have a partner who is the sole income provider, there is no getting away from it that the loss of that income coming into the household would be significant. To have a life insurance policy in place that would provide a pot of money for the family in the event of this loss would provide the reassurance that life may not have to change too much. A term life insurance policy provides cover for a set number of years depending on your requirements and the good news is, the younger you are the cheaper it will be.
Help Replace a Partners Income
If there are two of you bringing money into the household then life insurance may not seem as necessary but think about how you would cope just on your salary if anything happened to your partner or visa versa. Again a term life insurance plan would mean that for a specific time, perhaps while children are at home or bills are higher, you have that financial cushion if the worst were to happen.
Fund a Child’s Education
The day to day costs of raising a child aren’t cheap let alone the fees now demanded for further education. As much as we want our children to stand on their own two feet and support themselves, the bank of mum and dad usually helps our offspring through their uni years. So how would they feel if that bank had to close and their dreams end because they can’t afford to stay at university? The reality of losing one of you would be hard enough without also having to say goodbye to the future they had dreamt about.
Pay off Bills or Debts
It would be nice to think that when we die our debts die with us but this is not always the case. To save the family suffering from the financial burden of having to take on any outstanding payments, you could choose either term life or a whole life insurance policy. If your debts run over a specific number of years, then you could opt for a term life policy to mirror those years. If on the other hand your debts are more long term, then a whole of life insurance policy maybe more worthwhile. A whole life policy is a more expensive option but it provides life cover for the whole of your life; so as long as you continue to pay your premiums, a cash sum will be paid out when you die.
Cover the Mortgage
If you are concerned about who will pay the mortgage, then depending on the type of payments you have you may want to think about again either a term life insurance policy or a decreasing term life insurance plan. A decreasing life insurance plan provides cover during a specific number of years however that cover decreases over the term of the plan; so as your mortgage reduces, so does the cover.
End of Life Planning
An increasing number of people buy life insurance in later life to help family members when they are no longer around. Frequently the money is used to help with funeral costs so those left behind don’t have to foot the bill. To be certain of that payout regardless of when it is, you will need to look at whole of life insurance but do compare life insurance quotes before committing as there are two options available to you.
If you are happy to answer health and lifestyle questions then a regular whole life insurance plan may be suitable. The application process is longer and depends on your medical history but the cash sum paid out is usually higher.
If you are concerned about the state of your health and between the ages of 50 and 80 then you may want to consider a guaranteed life insurance plan. You are accepted regardless of the state of your health, with cover provided after an initial period of either one or two years. The cash sum does tend to be lower than the regular whole life insurance policy and there is a chance you can pay more in monthly premiums than the cash sum paid out, but that all depends on how long you live.
So as you can see, regardless of age and life style a life insurance plan really can give the gift of life to your family; a life that they can continue living comfortably just because you took the time to compare life insurance.