As we get older, we are bombarded with calls to get everything insured – including our houses, cars, and even our lives. When it comes to life insurance, it is often thought of as something you don’t need until you are older, but that is not always the case.
As the subject of life insurance is quite complex and confusing, we will firstly ask: “What actually is it?”
What actually is life insurance?
Life insurance pays your dependants a lump sum or regular payments in the unfortunate case of your death. This makes sure that your family will be financially secure and looked after once you are gone.
According to the Money Advice Service, there are two main types of life insurance: term life insurance policies, which run for a fixed period of time, and a whole-of-life policy, which does exactly what it says on the tin. You can also get individual life insurance or group life insurance from your employer via YuLife.
However, many people do not have life insurance. One study by YuLife found that only an estimated 30% of people in the UK have life insurance, which is equal to around 20 million people, 8 million households, and 1.1 million mortgaged properties. This leaves a whopping 70% of people in the UK without life insurance.
Therefore, if you are one of the 70%, here are 5 signs that life insurance would be right for you…
5 signs it’s right for you-
1. You are getting married:
When you get married, you might end up being the breadwinner or rely on the fact that you are bringing home two salaries between you. Thus, life insurance will make sure that your spouse is financially stable in the event of your death.
2. You are having a baby:
A child is dependent on you for everything – from getting dressed, to food, to keep a roof over their head. Therefore, if you die, life insurance can ensure that your child is provided for.
3. You are buying a house:
If you buy a house, the likelihood is that you have had to take out a mortgage. In the event of your death, life insurance can pay off your mortgage if you hadn’t paid it off already.
4.You are getting older:
Though it sounds morbid and doesn’t bear thinking about, we all die someday, and we are most likely to die when we get to a certain age. The expense of the impending funeral is also extremely steep, which means that many people begin to invest in life insurance as they increasingly discern the passage of time.
In fact, in the UK, people aged between 45 and 54 are the demographic most likely to be covered by life insurance.
5. You don’t want your family to have to pay inheritance tax:
When you leave money behind for your loved ones, they will have to pay an inheritance tax on the sum you have gifted them. However, life insurance is not subject to inheritance tax, and so you can make sure your dependents get the lump sum they need without any tax.
If you are ever unsure about whether you need life insurance, you can seek advice from a financial advisor. By taking out life insurance, you can make sure that your family will be looked after even after you are gone.
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