It’s worth considering life insurance if you have people who depend on you financially, such as:
a partner who relies on your income or your contribution to the household
children or young dependents
other dependents who rely on you as a caregiver
Having life insurance means that your family will receive money after you’re gone. This money can help take care of them at a difficult time. The money could be used to:
cover new costs, such as childcare
replace your income so your family can continue to pay the household bills
pay off big debts like a mortgage
Every family’s circumstances are different. It’s important to think about how yours would change if you were no longer around, as hard as that may be.
You may not need life insurance if:
you’re single and have no dependents
your partner earns enough money for the family to live on and can afford to pay for any new costs they may face, such as childcare
you already have enough cover in place
If you’re not the main earner of your household, you may think you don’t need life insurance. But don’t overlook your contribution.
For example, if you’re a stay-at-home parent – would your partner need to pay for childcare so they could continue to go to work? According to the Money Advice Service, the average cost of sending a child under 2 to nursery in the UK is:
£138 per week – part-time (25 hours)
£263 per week – full-time (50 hours)
You may already have some life insurance through your employer. If so, check what’s included to see if you need extra cover.
Think about how much cover it gives and for how long. Does the term match how long you will need it for? You also need to consider what would happen if you changed jobs, as you’ll no longer be covered through your employer.
Talking to loved ones about financial arrangements after you pass away is a difficult subject.
It’s not something we like to think about, but it’s really important to be open and practical so you all know what the long-term plan is.
Start having conversations about how your family will manage for money, if you or your partner passed away. It can help you understand if you need life insurance – and how much cover is required.
If you’re unsure about what’s right for you, our protection advisers can help you decide.
The more practical discussions you can have with your family now, the better – it can make a difficult time just that little bit easier.
So, while you’re on the subject, you may want to make sure your family knows:
where they can find a copy of your will
contact details for executors and the solicitor
details of any financial plans, policies and covers
how to get hold of other important paperwork, such as property deeds, bank statements and pension statements
if there are any joint debts that may need to be settled, such as credit cards or loans
It’s not easy to think about life insurance and what will happen after you’re gone. It’s a selfless act to think of others without any benefit to yourself. But it can make a world of difference to your loved ones and give them one less thing to worry about.