Do I Really Need Family Life Insurance?
Life insurance is often sidestepped as a seemingly superfluous expense. It is the kind of thing you hope you will never need, and therefore assume you can do without.
Unfortunately, the financial complications that can accompany the death of a spouse or partner can make an already horrendous time in life practically impossible to negotiate.
Family life insurance provides priceless peace of mind for those closest to you, in the form of essential financial support if the worst should happen.
What is life insurance?
Life insurance policies are typically finite, taken out over a specific period of time as required by the policyholder. The idea being that if you die or are diagnosed with a terminal illness during this time, a lump sum payment is made to your spouse, partner or family.
For example, if you take out a mortgage over 30 years, you may choose a similar life insurance term to ensure the debt will be covered.
In the event that a claim is made on a life insurance policy, the beneficiaries – i.e. those you designate to receive the money – can spend the funds any way they like. Most Life Insurance payments are used to clear outstanding mortgages and pay off other debts, though may be used to cover day to day living expenses.
Who Needs Family Life Insurance?
Family life insurance is considered essential where debts are taken on (such as a mortgage) that would be difficult or impossible for your family members to cover in the event of your death.
Likewise, family life insurance provides an essential financial safety net to cover essential living costs, if the policyholder who is the primary financial provider for the family dies during the policy term.
All family life insurance policies are tailored in accordance with the income level, outgoings and general financial situation of the policyholder. An effective life insurance policy will ensure that the beneficiaries named in the policy are supported financially – including debt repayment and living costs – in the event that the policyholder dies.
How Much Does Family Life Insurance Cost?
Family life insurance policy costs vary significantly, in accordance with the financial status of the policyholder, the length of the policy and the extent of the coverage required.
It is technically possible to take out life insurance starting from around £5 per month. As a general rule of thumb, however, the lower the monthly premium, the lower the payment received by the policy’s beneficiaries if a claim is made.
Life insurance costs are also influenced by factors such as the applicant’s age, occupation, lifestyle, smoker status, medical history and so on.
Is Family Life Insurance Really Necessary?
The short answer is yes – family life insurance provides essential financial support if the worst should happen, and priceless peace of mind if it doesn’t.
Nobody knows for sure what may be around the next corner. The fact that most life insurance terms pass without a claim being made does not mean it is a facility that should be overlooked.
Life Insurance is all about taking care of those closest to you, if you are no longer able to do so personally. There are policies available to suit all budgets, and the peace of mind that comes with quality coverage is often worth the low monthly premium alone.