Having a life insurance policy is one of the best ways to provide financial support to your loved ones after you pass away. If you're thinking about taking out life cover, it's good to think about what your reasons are. Planning for your loved one's future can provide peace of mind for you and them.
Do I need life insurance?
A life insurance policy could provide your beneficiaries with a tax-free sum of money should you pass away. It's the perfect way to plan ahead and ensure your loved ones aren't overly financially impacted by your death.
It allows them to focus on their grief, not paying the bills.
Why do people buy life insurance policies?
There are many different reasons people buy life insurance policies, here are some circumstances that might have you thinking about taking out some cover. Let's take a look together. ✔️
You're going to have a baby or already have children
Having children is one of the most popular reasons why people take out a life insurance policy. Having cover means you can provide for your family financially if the worst were to happen.
If your family depends on your income, taking out a life policy can help cover costs of childcare, education and even university tuition for the future. If you're a stay-at-home parent, a policy is just as important because it can cover everything that you do on a regular basis such as childcare, cooking, cleaning and being a chauffeur.
Writing your life insurance policy into a trust is also a great way to leave your loved ones money without them facing too much inheritance tax.
If you are pregnant or are planning to have a child in the near future, check out our article on life insurance and pregnancy to learn more.
You're planning to get married
Before you put a ring on it, you might want to think about which life insurance policy to take out. 💍
At Bequest, we recommend that people look at taking out single policies so you remain covered for longer. In a joint life insurance policy, when one of you passes away, the surviving partner is left without cover. The policy simply ends after the insurance payout is made.
If one partner is a main contributor to income in the partnership and wants to ensure the surviving partner is covered financially after they pass away, this is a perfect way to do so.
You support aging parents financially
If your parents are over 50 years old and are dependent on you for care or financial reasons, taking out a life insurance policy to ensure they are protected is a great option should the worst happen.
The costs of care can be quite high, so having cover to ensure your parents can remain cared for can give your loved ones peace of mind.
You're planning your funeral
Funeral costs in the UK average at £4,383 for a burial and £3,290 for a cremation. This can come as a huge financial shock to those around you after you pass away.
Taking out life cover can provide financial support and cover funeral costs when your loved ones need it most. 💛
You work for yourself or have a family-owned business
Depending on the insurance provider, you can actually name your own business as a beneficiary on your life insurance policy. Doing so means your business can continue operating after you pass away.
When taking out a business loan, most lenders tend to require that you have life cover in order to prove that your outstanding debts will be paid off. In this case, you might want to take a look at a decreasing term life insurance policy.
Your job is high-risk
If you have a job that puts you at high risk, having life cover may be a good idea. Whilst it might be hard to get covered with some insurers, or your premiums might be high, it's worth it to ensure your loved ones are supported if you pass away.
You might also be covered by part of your employee benefits package, however, more often than not, this isn't enough cover. And you could also risk losing this cover if you find yourself out of the job. Taking out an extra policy to ensure your loved ones are protected could be a sensible idea.
If you're struggling to get some insurance cover, check out our article here if you've been declined life insurance.
You have a mortgage
Having a mortgage is also one of the top reasons people get life insurance. A decreasing term policy is the perfect way to ensure your mortgage gets paid off as the premiums and payout amount can decrease at the same rate as your mortgage.
Meaning if you were to pass away before paying it off, your outstanding mortgage would be covered by your lump sum payout. 🏠
When you may not need life insurance
You're single or don't have many assets
If you're living your single life, you might not need life insurance. Or maybe you rent or don't have any joint debts, cover might not be for you right now and that's ok.
Just remember, that usually, the earlier you purchase life insurance, the cheaper it is. So getting on the insurance ladder now could help save you money in the long run.
You have no dependents
If you don't have anyone who is financially dependent on you, you could wait if there isn't anyone who would suffer financially if you were to pass away.
You have a low income or qualify for state benefits
If you don't have any extra money per month to spend on insurance, it might not be for your right now.
You have work benefits
For some, having cover through an employee benefits package may be enough, it's always important to check what cover you already have and make sure you don't over-insure.
What happens if you don’t have life insurance?
Of course, everyone's circumstances are different and personal to each individual, but here are a few things that could happen if you don't have life insurance.
- Your loved ones will have to cover the cost of your funeral
- Your loved ones will be without financial support if they are dependent on your income
- Your mortgage could go unpaid and your family may have to move out
- Your children could be left without financial support for education
Get a life insurance quote today
At Bequest, we are an insurance company that takes pride in a simple term life insurance application process that means you can get covered today. Get your quote to see how much it would cost you to protect your loved ones. 💛
Is it OK to have no life insurance?
If you are in a position where you aren't in need of having a life insurance policy, it's okay to not have one. If you're single with no dependents or on a low income, you may want to leave life cover for now.
Is life insurance worth it if you're single?
Just because you're single, it doesn't mean you don't need life insurance. If you have a mortgage, debts, dependents or are looking to cover the costs of your funeral, a life policy might be right for you.
Why life insurance is important in our life?
Life insurance is important as it's a way to show support for our loved ones after we're gone. It takes the financial worries out of an already tough time.
Is life insurance always necessary?
Life insurance isn't always necessary. If you are single with no dependents, no financial commitments or don't have extra finances currently, it may not be for you right now.
What is the average life insurance cost per month UK?
Everyone's circumstances are different and the price of premiums can vary depending on this. In the UK, the average cost of life insurance monthly premiums varies from £13.24 to £30.40. At Bequest, they can start from as little as £6.70/month. 👏