You can’t predict the future, but you can protect it

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According to *these insurance stats* 42% of people with a mortgage have no life insurance, with only 50% of mortgage households having life insurance in place. Why is this?

It’s too expensive

As you get older it will cost you more, but life insurance is not as expensive as you may think. The rates will vary depending on the type of life insurance policy you take out and your financial adviser will be able to guide you through the options that best suit your situation. Like a lot of personal insurance plans, the earlier you take it out, the cheaper your premiums will be.

I don’t know how much life cover I will need

Everyone’s needs will be different and the only way you can work out how much life insurance you will need is to understand the needs of your beneficiaries. You should consider any debts you have outstanding such as a mortgage or loans, and also things such as childcare, school fees and higher education costs.

The easiest way to do this is to work out how much money each of your dependents need each year and for how long. For example:

Child 1 £6000 for 10 years = £60000
Child 2 £6000 for 8 years = £48000
Partner £20000 for 10 years =£200000
Total £308000

If you’re still unsure, get in touch with your insurance broker who will review your income and expenditure to work out the optimum cover at no charge for the initial consultation.

I don’t understand the different types of life insurance

Term insurance cover-You choose how much you want to be insured for and for how long. If you die within this term the policy will pay out to your beneficiaries. However, if you don’t die within the policy term the cover simply comes to an end.

Whole of life-This type of policy guarantees to pay your dependents irrespective of when you die. It is usually more expensive than term insurance because a claim will always be made.

Some whole of life plans charge a fixed cost for a fixed amount of cover so you know exactly what you will be paying and how much you are covered for from the start. There are also plans which charge fixed premiums up to a specified age, after you reach that age the cover continues but you no longer have to pay.

Decreasing-term life insurance policies-As the name suggests, with this type of policy the amount you are insured for reduces as time goes on. These policies are quite often used to cover debts that reduce over time such as a repayment mortgage, so you can be assured your debts are paid off.

I don’t need life insurance

Ok, so those who are young with no dependents or those whose kids are independent and have no mortgage left to pay might not need life insurance, but what about these people:

The main breadwinner-Life insurance can provide a lump sum if you die and enable your family to pay everyday expenses.

Stay at home parent-Life insurance would provide the money to pay for things the stay at home parent would have done such as child care and household maintenance.

Mortgage payers-Life insurance could pay off your mortgage and enable your family to stay in the home.

Individuals with over £325,000 in assets-Life insurance could provide a beneficiary with the money to pay inheritance or estate taxes.

The most important function of life insurance is to provide a lump sum of cash and enable the family of the deceased to continue living comfortably. But you should always remember that life insurance will contain exclusions, limitations and terms, which is why we recommend speaking to a professional for financial advice before going ahead.

To find out what the best options are for you, contact us on to book a free initial consultation.