What is the best type of life insurance for you?
There is a plethora of life insurance products on the market for good reason. Each is designed to suit the particular needs of an individual or family during different stages of their lives; what might be suitable when you’re single with no dependents may not be appropriate when you have a mortgage and a baby on the way.
Let’s have a look at a few different scenarios where you might wish to consider buying life insurance and how much cover you will need.
Single with no children
At this stage you can probably do without life insurance. If no one relies on you financially then despite the fact that your untimely death would be a tragedy for your family and loved ones, financially speaking, you will not be leaving them in the mire. If you worry about the costs incurred as a result of your death, i.e. funeral and burial costs, you may wish to purchase an inexpensive plan which would cover these costs.
Just married
A marriage in itself does not necessarily mean it’s time to invest in life insurance. As this stage it is more often the events associated with this period of your life such as buying a home and having children which prompt a safety net being put in place. Life insurance becomes more expensive as you get older, and any decline in health could make prices rise further. In this case it’s best to start young.
Your first mortgage
When buying your first home you’ll hear plenty from your mortgage provider about the merits of mortgage protection insurance. They’re right too; mortgage protection insurance is an invaluable product you might be foolish to go without. However, before agreeing to your mortgage lender’s terms, make sure you shop around. Quotes from high street lenders are rarely as competitive as those from independent insurers or brokers.
The pitter-patter of tiny feet
You should seriously consider life insurance during the years your children rely on you for financial support. If you or your spouse pass away, will they be able to bear the burden not only looking after the children, but also earning a stable income?
At this time of your life it is worth investing in a sizeable policy if you have sufficient disposable income to do so. Any payout would need to cover not only the costs of raising a child but also possible university fees in the future. If enough life insurance is in place the payout should allow your family to maintain the same standard of living they have been used to.
If you already have a life insurance policy in place, it might be worth re-evaluating to make sure your level of cover is sufficient.
Retirement
When it’s time to consign your briefcase to the attic and start enjoying the finer things in life, any term life insurance policy you may have had earlier in life will have likely expired. Buying insurance at this time in life can be expensive as the risk of death is of course far greater. If you have already invested in whole life cover, you will be insured until you die. However, if you are paying for a whole life policy you no longer really need, you could terminate the policy, save on the cost of monthly premiums and make the most of the policy’s cash value.