There are several things that you need to consider and anticipate with what your demands might be in the future.
Below, we will take a look at some ideas to think of to make sure you get the right life cover for yourself and your loved ones. ☂️
The first steps for a life insurance policy
Before you even look at what life cover is available, you should take note of what your personal circumstances are. This isn’t just about you (sorry! 😜) but also includes considering your family’s needs along with any other beneficiaries (those that get your stuff in your will) that you intend to include.
After this, you also want to think about your monthly budget. You need to know exactly how much cover you can afford and what would need to be covered in case of your death.
The two types of life insurance Bequest offers
We have two options for life insurance policies. Once you know the type of life insurance you need, you can go through our simple application process and get a life insurance quote today. 🙌 There are pros and cons to both, but they are:
Level term life insurance allows you to decide how much cover you want as well as the term length. ☂️ Your dependents will receive a fixed lump sum if you die.
Decreasing term life insurance is a common policy if you're looking to cover your mortgage as the monthly premiums decrease over your term. 🏠
Covering your expenses with life insurance
The biggest financial burden that your family will have once you pass away is your expenses. Life insurance covers many different expenses. Liabilities and expenses are something that you owe, usually in the form of money. 💷
So what kind of expenses would life insurance cover?
Cover your mortgage
The largest liability that most people have is their mortgage. Not only can this be a huge sum of money but also the monthly payments are often much higher than any other monthly bill. Without life insurance, many families are forced to sell their homes as it becomes unaffordable.
Even if you have a joint income, it’s often the case that the payments can’t be made on a sole income. Having a policy that can cover the remaining amount on the mortgage can be a huge relief. While it’s not law to take out life insurance when you get a mortgage, lenders may try and offer you a deal. You are under no obligation to take what they offer, make sure you find the best policy for you.
To learn more about life insurance for mortgages, take a look at Do I Need Life Insurance For A Mortgage?.
Cover your income
This is going to be one of the trickiest aspects to determine as you have to try and figure out how much your family will need after you’re gone. This can be even more difficult if you’re renting or bringing in most of the household income.
Taking out life insurance means that once you’re gone, your family would have to go through an adaptation period and having a lump sum payment can give them the time and space they need.
Cover your dependents
If you have young dependents, then you need to consider how they are going to be cared for if you pass away. If you play a large role in their childcare then you have to consider whether professional childcare would need to be paid for. Beyond childcare, a lot of parents think of education. Whether this is a private school or paying for their university fees, you may want to consider adding a certain amount for them into your life insurance policy. 👪
Cover your debts
A dangerous life insurance myth
A dangerous myth about life cover is that your debts die with you.
But that is NOT always true! 😲
In fact, they come out of your estate (all the money or property you own), but life insurance can cover these debts and leave your loved ones with money left over. This is especially important if you have any joint debts, as these will become the sole liability of your partner.
You need to add all of these and include any type of debt that you have, including loans, credit cards, tax or anything else that you may owe. With the right life insurance policy, you’ll be able to clear all of these and make life a lot simpler for your loved ones.
Bequest life insurance
So, how much life insurance do you need? Well, everyone is different. Also, not everyone has the luxury of spending a lot when it comes to paying your premiums to cover everything they may need. Sometimes you need to prioritise what needs to be paid off and often a mortgage will come near the top of that list.
If you’re still unsure of how much life insurance to get, asking your friends and family, or doing some more research could be helpful. You want to be able to put your family in the best situation possible after you’re gone and give some peace of mind whilst you're here. 👌 Also, keep in mind that with Bequest, you can make changes to your policy throughout the term. Your policy does not have to be stagnant, it can change when your life changes. 🪄