Do I need Life Insurance?
Our advice: The short answer is: yes, you do if you have anyone who is dependent on you financially e.g a partner, your children, or spouse who depends on your income, or a mortgage on the family home.
How does it all work?
Life Insurance is a contract between you and your insurance company which helps your family cope financially incase you die or are diagnosed with a terminal illness. You choose the amount of Life Cover and it will always remain the same, unless you alter your policy.
When is life insurance valuable to me?
Life cover can be really valuable in certain situations and some of these may apply to you now.
- People depend on you financially
- You have a mortgage
- You want to leave money to your loved ones
- Your lifestyle
- You own a business or have a partner included
“On average the cost of raising a child over 21 years will cost you £231,731“.
The first stage is learning who you are financially dependant on. do you also have a partner or child who relies on your salary? Would other family members find it difficult if you were no longer there and they needed your support?
If none of these statements apply to you, you may NOT need to take out life insurance at this point in your life.
How much will it cost?
Based on previous quotes the average monthly cost for a male/female in there mid 30’s costs £10 a month. This would apply to someone who is a non-smoker and has a light alcohol consumption.
Your actual premium depends on your age, lifestyle choices and medical conditions and your amount of cover will also alter the final outcome.
Why might I not need Life Insurance?
Here are a few reasons why you might not need to get life cover:
- There are no financial dependants and will probably not have any in the near future.
- You are too young for life insurance and still live with your parents, with a low income occupation.
- You’ve retired and living off other benefits or income sources. You will also know that your spouse will also be able to live the same life and provide enough income.
Does life cover style apply to me once i’m over 70?
If you have no reached your 70’s the first thing to remember is that your life insurance will now be substantially higher. Here are some of the reasons this will happen:
- Medical conditions are more likely happen at your age
- You are at higher risk of developing more health conditions
- Now your life expectancy is even shorter
“The most common form of life insurance once you’ve reached 70’s is whole of life and over 50’s plan“.
Other types of life insurance
- Decreasing term life insurance
- Funeral cover
- Life insurance with critical illness cover
What is decreasing life insurance policy?
A decreasing insurance policy is an amount of cover that decreases over time, although these premiums will usually be fixed and remain the same for the duration of the policy.
If you are looking for cheap life insurance policy, then decreasing term life cover will be more suited towards you. Provided that your cover does decrease over time it is often significantly less expensive.
It might not be the positive policy, but it will be valuable to you at some stage in your life. It’s important to think about your family and how they will cover the costs of your funeral.
Life insurance can help ensure there is enough money to pay for a funeral cost.
“The average life expectancy in the UK is now 80.96 years“.
Provide some inheritance
You might want to leave inheritance to your children and to your future grandchildren. This could be a provision in your life insurance policy.
However a key consideration for this is the tax applied. If single or divorced inheritance laws state a property valued over £325,000 could be taxed 40%. The same applies to couples married or widowed with a property valued at £650,000.
How can I get life cover?
There are now several ways you are able to get life cover. However with Blue Water Financial speaking to one of our financial advisers is the best way to go. We will advise you on the policy you have been quoted to give you best possible options with your cover amount.
If you have never had any major medical issues, never smoked and you are a very light drinker, then you can expect your life insurance policy will be much lower than someone with current health problems. You may also be offered cover without having to take a medical examination.
Benefits of being an employee
In your occupation sometimes the employer will offer the employee some protection. However if you were to change job it is unlikely that your current protection will continue with the next one.
What should I do if my personal circumstances change?
Your personal circumstances might have changed e.g you’ve had another child, bought a larger house or had a divorce. This would mean your policy doesn’t meet your needs, so there are a few things you could do.
Depending on your policy terms it might allow you to increase your level of cover to what you need. However you might need to cancel your existing policy and plan to set up a new one.