Once you become an adult, the responsibilities only continue to pile up. From buying a house, getting married and having children, more and more things become a priority. Sadly, disaster can strike at any time, in which case your family could be left unprotected. That’s where life insurance comes in. We have had life insurance since we got married, we think it is really important.
Everyone has different reasons for getting life insurance. Some people may use it to ensure that their loved ones are financially secure in the event of their passing. Others might seek cover to pay off debts or cover funeral expenses. Let’s look closer at why you may need cover.
What Life Insurance Actually Covers
When you have a life insurance policy, you are financially protected in the event of your death. Typically, policies provide a death benefit to your loved ones, which can be used for various purposes such as:
- Providing financial support for your family
- Covering debts such as a mortgage or loan
- Paying towards your funeral and other end-of-life expenses
- Covering debts such as a mortgage or loan
- Paying towards your funeral and other end-of-life expenses
- Funding your children’s education
Unlike other financial products, such as savings or pensions, life insurance has a unique role in offering peace of mind. While other products can lose value or fluctuate with market conditions, life insurance provides a payout regardless of economic uncertainties.
Who Typically Needs Life Insurance?
There’s a misconception that only those with a family need life insurance to protect their dependants. While it’s true that having dependents is a significant reason to consider life insurance, anyone with financial liabilities or specific end-of-life wishes may benefit from having a policy.
Some of the main groups that can benefit from cover include:
- Parents with children or dependants.
- Homeowners with a mortgage.
- People supporting a partner financially
- Business owners or self-employed
Even if you are single or have no dependants, life insurance can still be a worthwhile purchase. Life can move so quickly that before you know it, you could suddenly have additional financial responsibilities or loved ones who depend on you.
How Much Cover Do You Need?
One of the biggest questions to consider when buying life insurance is determining the appropriate amount of coverage. The right amount will vary from person to person.
There are plenty of factors to consider, including whether you wish to cover:
- Mortgage or rent payments
- Children’s education.
- Household bills and living costs
- Outstanding debts
- Leave a legacy
Naturally, the more cover you are insured for, the higher your monthly premiums are likely to be. Likewise, if you have a large family, you will most likely require a greater amount.
Common Myths About Life Insurance
“It’s only for older people.”
Not true. Life insurance can be useful for any stage in life, especially if you have a young family with little savings to fall back on. Whether you’re in your 20s or 50s, having cover can provide essential peace of mind.
“It’s too expensive.”
You may think life insurance can be costly, but policies can be more affordable than you might assume. Several factors, such as your age, health, and the type of coverage you choose, all play a role in determining the cost.
Policies like life assurance tend to be more expensive as they cover you for the rest of your life. Whereas term life insurance tends to be cheaper as it covers you for a set number of years instead. So if you were to purchase a term life policy in your 20s, your cover could be surprisingly affordable.
“I won’t need it because I’m healthy.”
Nobody is immune to unexpected life events. While you may be healthy right now, there’s no telling what could happen in the future. In this case, it’s best to be prepared for any eventuality, not only for your peace of mind but also for the financial security of those who depend on you.
What Happens If You Don’t Have Life Insurance?
If you don’t have life insurance in place, your loved ones may have to rely on whatever savings or assets you leave behind. This could be enough in some cases, but for many families, it might not stretch far enough to cover ongoing living costs or unexpected expenses.
Without a policy, the financial burden could fall to your partner, children, or other relatives, potentially forcing them to dip into savings or take on debt. At what is already an emotional and difficult time, the added financial pressure can make things even harder to manage.
In short, not having life insurance means leaving your family’s financial security to chance.
Ultimately, whether you need life insurance comes down to your personal situation. If you have a mortgage, dependants, or loved ones who rely on your income, a policy can offer reassurance that they’ll be protected if the worst should happen.
On the other hand, if you’re single, debt-free, and financially independent, you may decide that life insurance isn’t essential right now. That said, life circumstances change quickly and arranging cover while you’re younger and healthier often means lower premiums.
The key is to think about who would be affected financially if you weren’t around, and how you’d want them to be supported. If ensuring their security matters to you, then life insurance is likely worth considering.
