Thinking About Life Insurance? Read This Article
But one of the biggest problems with life insurance is that people often think about it, but never take action. In this article, we’re going to look at major moments in your life and discuss why life insurance is almost certainly worth having, and taking the time to arrange.
When You Don’t Need Life Insurance
Generally, the thinking is that if you’re young and single, your partner earns enough for both of you, or you’re on benefits because you’re not working or on a low income, then you don’t need life insurance.
There are still some good reasons to get life insurance even if you do fit into the above categories, but it might not be an absolute essential or a priority in those circumstances. Let’s look, then, at when you should definitely be thinking about taking out a life insurance policy.
Your First Job
There are a couple of very good reasons why you should consider getting life insurance when you start working.
Firstly, it is incredibly cheap to get insurance when you are young and healthy. The earlier, the better. If you have no illnesses and live a lifestyle that suggests you are unlikely to get any, the risks of you dying are small. This will be reflected in your premiums and how much your policy will be worth.
Secondly, the main benefit of getting life insurance when you’re healthy is that you have no pre-existing conditions. If you wait until you are older, there is much more of a risk that you may have an illness that will preclude you from getting cover.
So, consider getting life insurance early, even if it’s only to cover funeral expenses so your parents don’t have to pay for them. You can always increase the value of your policy later, although that may depend on the company you are with.
Your First House
When you buy your first home, and your first mortgage to go with it, you absolutely must have life insurance to cover the cost of your mortgage. Now, if you have already got some insurance for funeral expenses, you may be able to just increase that cover. Of course, your premiums will go up but you would be paying higher premiums, no matter what anyway.
You may also be thinking that you need to have insurance if you have a mortgage but there is, in fact, no law that says you have to. However, getting in early means that if (or when) you get into a long-term serious relationship in the future, and you start a family, your family will be covered if anything happens to you.
If you have a mortgage, no life insurance and you die, no one in your family will benefit. That might sound a bit mercenary but without life insurance, the only ones who benefit are your bank or building society manager. No matter how much your property is worth, all your lender will want to do is recover whatever is left of your debt. So get life insurance, if for no other reason than to make sure your family benefits more than your bank.
You Get Married
If you get married or enter into a serious long-term relationship, it is very important to ensure that both of you have life insurance cover. This could be under a joint policy or on a policy of your own. There are a couple of reasons for this.
First of all, if you die, your partner is going to go through probably one of the worst times of their life. What they don’t need is additional strain caused by financial worries and uncertainty about whether they can keep the house you both shared.
Not being able to meet the mortgage payments, or pay for other loans, debts and living expenses without your wage coming in, would be an extremely distressing situation to find yourself in, on top of the shock and grief of losing your loved one.
Secondly, by having life insurance cover, you can ensure that your partner is not left struggling to fund the costs of a funeral, which can run into several thousand pounds these days.
You Have Kids
This is a no-brainer, as they say, and possibly the biggest reason for taking out a life insurance policy. If you have been unsure about whether to take life insurance up to this point in your life, now is the time to act on your ponderings. There is no argument against life insurance when you have children, and that applies no matter whether you both work, or whether one of you is the breadwinner while one of you is a stay-at-home parent. In either case, make sure you both have life insurance.
Studies have found that the cost, in financial terms, of replacing the services of a parent who does the domestic and childcare work in the home, is around £800 a week! That means that if you do not insure both parents in a relationship, even if one does not bring in a large (or any) wage, you would still be financially far worse off if that parent was to die.
Life insurance may sound brutal in that it reduces the roles of parents to bare facts and figures, but without thinking about these things in this way, you would find yourself in a far more distressing situation if the worst happened.
By making sure that both you and your partner are well insured, the pain that your children would feel in losing a parent, would not be compounded by losing their home and potentially their other parent when they are forced to work longer hours, too.
Wrapping Everything Up
These four major events in your life should always prompt you to take out life insurance if you do not already have it, and reassess your cover, if you do.
Don’t make the mistake of putting off taking out life insurance. Putting off things often becomes a habit and then, when your family really needs the protection life insurance provides, it will be too late.