Life insurance (sometimes it’s also called life assurance) is a product that can give your family some financial protection if the person with the policy was to pass away. This can be important if, for example, that person is the main breadwinner, because if they’re no longer around, the family left behind may not have a way of paying the rent, the bills and generally keeping things going. Even if you are at home and not bringing home an income, it may still be worth thinking about what could happen to the family if you were to pass away.
When you take out a life insurance policy, you pay a monthly premium into a pot, along with many other policy holders. This pot of funds is used to pay any valid claims that come along.
Life insurance could help to cover costs that your family would face if you’re gone. There are different products to suit different situations. Some people are looking for amounts large enough to cover rent, mortgage payments, household bills and the cost of running a car. Others are looking for smaller amounts to cover their funeral costs and any final expenses they may leave behind.
If you have a family that depends on you financially, then life insurance can be worth considering, especially if there’s a mortgage, debts, rent or day to day living expenses that would be a struggle for your dependants to cover if you were no longer around.
If one of you stays at home, for example to look after the kids, and brings home little or no income, the cost of childcare if they were to pass away could still have a big impact on the household budget, so a joint policy with different cash sums could be an option.
But it’s not just for those people who are working with families and dependents in the home. You might have retired and want to get your affairs sorted out. Leaving some cash for your funeral or even as an unexpected gift to your grown children or grandchildren could be something that you would like to do.
Life Insurance may not be suitable for everyone, for example if you are without dependents, have little or no debts and have healthy savings, you might decide that you don’t need anything more.
Otherwise, the alternative could be a savings plan or long term investments. This can be a good option if you have available funds that you know you will save or invest, especially if you are only looking to build up a small cash sum. However, the risk with this option is the uncertainly of when the funds might be needed and what you've managed to save in that time. Certainly, larger cash sums to cover a family’s needs may be difficult to accumulate.
The cost of insurance will depend on the type of product you need and your own personal circumstances.Getting a quote should be easy and quick to do, but many factors will influence your monthly premium such as:-