Do I need life insurance?
Nobody likes to think about their own death. But just for a second, set your emotions aside, and answer this question – would anyone suffer financially if you were to suddenly pass away? If the answer is yes, it may be worth investing in a life insurance policy for you and your dependents.
4 common reasons why people invest in life insurance
Life insurance offers peace of mind. You know that, if the worst happened, your financial matters would be taken care of. There are certain milestones in a person’s life when this knowledge becomes more important and, here, we take a look at each of these in detail.
1. Buying a new home
Your mortgage is likely to be your biggest debt. If you die before it has been repaid, the commitment falls to either the person you live with or a relative – and you need to be sure they can afford it. This is why most mortgages now stipulate that you must invest in a mortgage life insurance policy.
The lump sum can either be used to clear the debt or cover the cost of the monthly repayments. But either way, you can rest assured, your loves ones will still have a roof over their heads.
2. Starting a family
Having a child often changes a person’s perspective on the future. They like to know, if they suddenly passed away, their spouse and children could cope financially. It costs a huge amount of money to raise a child and the pay-out from a life insurance policy – or family protection insurance – can help to cover everything from food and clothing to school trips and university fees.
Life insurance is also a great way to avoid inheritance tax complications. Rather than making a huge dent in your children’s nest-egg, tax bills will be covered by the policy’s pay-out – and your children will be free to enjoy the full sum of money that you worked hard to save and leave behind.
3. Financial expenses
Funerals are notoriously expensive. If the unexpected were to happen, it’s nice to know that your family wouldn’t have to worry about the cost – whilst also dealing with their grief.
This is one of the main reasons why people choose to buy a life insurance policy. They don’t want to be a financial burden once they die and life insurance is a way to make sure there’s enough money for their send-off. Even the pay-out from an over 50s policy – which is generally lower than other products on the market – is enough to pay for a typical funeral service and wake.
4. Business endeavours
When going into business with someone, it’s usually a good idea to take out life insurance on each other. If either of you were to suddenly die, the insurance pay-out would cover the cost of the remaining shares – effectively buying out the deceased’s family and allowing business to continue.
Most businesses also like to offer employees group life cover or relevant life insurance. It may seem like a small gesture, but such a ‘job perk’ can help to boost morale and attract new employees.
Get in touch for the ideal life insurance policy
Here at Rigby Financial, our team of insurance advisors demonstrate strong knowledge and experience in this area. They can offer further advice about whether you need a life insurance policy and, by using a thorough ‘fact-check assessment’, they can help to select the right cover for you – whether that be a mortgage life insurance policy, family protection or relevant life insurance.