Do I need life insurance?
Each and every single day we get emails from users asking ‘Do I need life insurance?’ and the answer is obviously different for every customer. Life insurance provides you with a policy which will pay out money to a person, or people of your choosing if you were to lose your life. It’s the peace of mind many families need when taking out a mortgage, especially one that they would not be able to afford if they lost the earning power of one of the people paying the mortgage.
There are a range of different life insurance policies, some which offer a payout which stays the same throughout the policy, and some where the payout reduces as the policy gets older. There are also life insurance policies which pay out a monthly payment, rather than one large lump sum, effectively replicating the income the customer would have bought to the family.
In what situations do I need life insurance?
There are many situations where you might need life insurance, many where it is essential and some where it may not benefit. If you are in the process of buying a house, and your family would not be able to afford the mortgage payments if you were to die suddenly in a year’s time then you do need life insurance.
If you are buying a house and the family would not need your income to pay the mortgage, but would be a lot less secure financially and would have less breathing space then you should consider life insurance, as it will offer them financial stability if the worst happens.
If you are buying a house on your own, and have no family and would not worry about who the house goes to if you were to die suddenly then you may not need life insurance, as you have no one to leave the money to.
When should I purchase life insurance?
As well as being asked ‘do I need life insurance’ we also get asked when people should buy life insurance. Traditionally people have always bought life insurance when they buy their first home but with more people not able to afford to buy until a later age, it should be considered much earlier, especially if you have a child. You should buy life insurance as soon as you have a financial responsibility which would benefit from a financial contribution if you were to die suddenly tomorrow.