Life insurance is a policy that will payout money, if a person dies during the term of the policy. It most commonly covers the value of a mortgage, so if one partner dies, the payout goes to the remaining partner to settle the balance on the house.
A life insurance lump sum can also be set up for any amount of money and can then be used to cover lost income, rent, household bills, and debt etc. for many years into the future. Allowing you to grieve and not miss your partner's income, preventing you suffering financially too. Ideally you will have your life insurance paid to each other, if one of you dies, or to another close relative depending on your own situation. For example, an older child (over 18) or designated future guardian.
When should you take out Life Insurance?
ASAP! No, honestly, as soon as you can and when you can afford it. When you start renting or get a mortgage on your home, are the most common times to take out life insurance.
Other important life events that we would recommend you consider taking out a life insurance policy are; Getting married, moving in permanently with your partner, expecting or recently had a baby.
For some people, it can take a life event to happen, close to you, to trigger a thought, to look into life insurance. Maybe a relative or friend has been diagnosed or passed away from cancer, for example. Or some friends have got married and mentioned it in conversation.
Do you need Life Insurance?
Life insurance isn’t a necessary insurance like car insurance is, if you own a car. And it isn’t even required any longer, to take out a mortgage, like it once used to be.
However, we would advise that you need life insurance if you have a partner, children, a mortgage or other financial agreements.
We hope you will never need to use it, but if the worst should happen to you or your partner, you will have the reassurance that you have cover. A payout resulting from a life insurance claim, will help your close relatives or dependants have the security of having the mortgage or debts paid off, and possibly still have money left over for their future.
If your husband or wife (or life partner) was to pass away, all the financial commitments you made together, would then fall solely to you. Grieving is hard enough without having to worry about paying bills and wondering where the money is going to come from to pay off the mortgage or other loans and bills etc.
You don’t just lose your partner, you lose their income into the family. Two salaries now become one and life will probably be quite a bit harder to manage if you have children. A life insurance payout can also cover money needed for increased childcare, hired help or time off work for yourself to do housework etc, a respite holiday, or to put aside for the kids education and future plans.
Having a life insurance policy in place will give them the opportunity to continue living the standard of life you’d like for them.
Your monthly premiums depend on the policy type, your age, health and lifestyle
You can choose the best sum assured and term to match your affordability
By having insurance it can help prevent any financial burden
A lump sum is paid out if you pass away
Money can be used to pay off your mortgage, replace your income, pay for childcare or education costs and maintain your families standard of living
You can choose who the policy pays directly to after you have passed away