Have you ever thought about buying life insurance, but haven’t felt the need to actually go out and buy cover? In the present, it’s merely just a piece of paper that forms an agreement, providing funds in the event of your death. It’s that death in which the policy goes from paper to practice
1. Your family relies on your income
Probably one of the main reasons people chose to take out a life insurance plan is to protect their family. For context, let’s say your family relies on you to provide the essential costs i.e food, electricity, petrol, and mortgage or rent payments. But what would then happen if you were to pass away without any form of financial protection?
Best case, your family could still get by if they have savings or your partner or spouse is able to replace the lost income. Worst case, they find themselves struggling to get by, in which case they may have to cut back on key expenses.
If you’re worried that your family would suffer financially in the event of your death, having life insurance could provide a crucial safety net as well as peace of mind.
2. You’re getting married
Tying the knot is a wonderful milestone, but it’s also a time where responsibilities become much more serious. Whereas, before, you only had to yourself to think about, now you’ve got your partner’s needs to consider.
You may both rely on each other’s income, in which case your death or your partner’s death could significantly impact the other. There may be household bills you share or debts you both have together which you or your partner could struggle to cover alone. In this case, you want to get cover for your partner too.
With a life insurance policy, it’s a completely different story, this way either you or your partner would be protected if anything was to happen to the other.
Joint life insurance is one type of policy that could benefit you as a couple, in that it can cover both parties under a single policy. Then if anything was to happen to you or your partner, the surviving party would receive a lump sum payment to help cover any financial obligations.
3. You’re about to have a baby
Many people will test that the birth of their child is one of the best moments of their lives. Like marriage, it brings huge responsibilities. Now, the stakes are even higher, especially if you already have children. If anything were to happen to you, it could put your partner in a difficult place. For starters, they may be unable to work whilst caring for your child, which could impact them financially.
Owning a life insurance could provide your partner with the funds to support your child as they grow, along with other living costs. It could be used to support their education, or used as a trust fund for their future.
If you have a baby on the way, some form of protection is essential. Policies like whole life insurance could be handy as they last for the rest of your life, as long as you continue to make premium payments. That way even as your children grow up, they’ll always have a support plan in place should anything happen to you in the future.
4. You’re about to buy a house
Buying a home is typically one of the biggest financial commitments a person makes in their lifetime. On average, a mortgage can last between 25-30 years, which if you were to die before it’s repaid, could put your family in a tough position.
Without your income, your partner or spouse could find themselves unable to make the monthly mortgage payments. In this instance, they may be left with no choice but to sell your home and downsize to a more affordable option.
There’s no legal requirement to take out life insurance for a mortgage, though your lender may recommend it. So if you’re looking to buy a house at some point in the future, it may be worth investing in cover to protect your home if anything happens to you.
5. You don’t have any savings
While it’s also a good idea to have some form of savings, not everyone has the opportunity to do so. If you currently have no immediate savings to cover unexpected expenses or emergencies, you’ll want to act sooner rather than later. If not, you could put your family in financial peril if you were to suddenly pass away.
If you’re concerned about what might happen to your family if you died, or you have a lack of savings, life insurance could be used to fill that void.
Ideally, you would want the cover amount to fulfil your family’s spending commitments, as well as paying towards costs like outstanding debts or funeral expenses. That way, your family would have financial support even if they don’t have any savings to fall back on.
Signs you may not need life insurance
Although life insurance can be a useful asset in times of need, there are some scenarios where it may not necessarily be required. This can include situations where if:
- Your family no longer relies on your income, such as if your children have grown
- You have no dependents or debts that would need to be paid off in the event of your death
- You already have a substantial amount of savings that could provide for your loved ones
- You’ve retired and have enough savings or a pension to support your family
While these situations may have less demand for life insurance, owning cover could still come in handy regardless of what stage you are at in life. Even if your children have grown and have kids of their own, your policy could still be used to support them in the future.
