Five reasons why you may need life assurance
As we go through life, our circumstances change and none of us can predict the future. Below are five reasons why you should make life assurance, commonly referred to as life insurance, a priority:-
1. When you start a family
When children arrive there is the sudden realisation that a new addition is completely dependent upon us, for a very long time. If a parent dies, there would be a huge financial burden on the surviving parent, as well as the emotional turmoil of losing a loved one. Life assurance can at least alleviate this burden and help a family to maintain the life style which they have previously enjoyed.
2. When you want the best for your children
We all want our children to do well in life, taking out life assurance can ensure that funds would be available to them if you were no longer there to provide for them; this could help with education costs, or getting their foot on the property ladder.
3. When you rely on two incomes
When we share our life with someone many of us depend upon two incomes, or on one if a parent is staying at home to look after children. If one of you were to die, life would be very difficult for the surviving partner emotionally and financially. It is also often a misconception that a stay at home parent does not need life assurance. Research carried out by Legal & General in 2015 estimated the “value of a parent” to be between £21,601 and £29,535 per year. This included covering the cost of child care, cleaning, the weekly shop, and taxi service; All things carried out by a stay at home parent and would be a cost, if we had to employ someone else to do them.
4. When you buy a house
For most people, buying a new house entails taking out a mortgage. Research carried out by Scottish Widows using YouGov in 2018 found that 50% of people in the UK with a mortgage do not have a life assurance policy in place. Could your family maintain the mortgage repayments and family living expenses without you? By taking out life assurance and/or critical illness cover this would ensure that your family is not exposed to the financial burden of a mortgage if you were to die or become critically ill.
5. Getting divorced
Divorce doesn’t necessarily mean that financial commitments come to an end. Maintenance payments are often made for children or to a former spouse. If the person paying the maintenance were to die, the payments would stop. It is possible to protect these payments with a form of life cover, arranged on the life of the person paying the maintenance with the policy owner being the recipient of the payments, thereby providing financial security for the recipient.
Unfortunately none of us knows what is around the corner; however we can plan to ensure that your family is financially protected if the worse were to happen.