Decide whether you really need life insurance
This is the first question you should ask yourself.
1. If you have children or others who depend on you financially then yes, life insurance is important and you're doing the right thing buying a policy.
If however you're a single with no dependents, who would benefit from the insurance should you die? Save your money! Alternative products such as income protection insurance or critical illness cover may suit your needs more adequately.
2. If you're a full time parent then it's important you have life cover even though you don't actually have a salary. Take a look at Why stay-at-home mums and dads need life insurance to find out more.
3. Remember, the State will not take care of you. It really is very risky to skip life insurance entirely and rely on the State to take care of your family's financial needs in your absence. It's true there is some financial help available from the government, but I can't really stress enough how limited it is.
For example, your spouse or civil partner may be entitled to a tax-free Bereavement Payment of £2,000 on your death as long as you have paid sufficient national insurance contributions. But this amount really won't last long.
And if you have a joint mortgage with a partner and you die, your partner will be liable to meet every penny of the mortgage payments by him or herself, or face losing the family home.
If you leave financially dependent children behind, your surviving spouse or civil partner may be entitled to Widowed Parents Allowance (or WPA). But, on current rates, the maximum payment is just £95.25 a week.
I think it's pretty easy to see that State benefits alone definitely won't provide all the protection your family needs.
Compare life insurance quotes using the lovemoney.com life insurance service
Next task: Decide which type of policy you need.
Register now to adopt this goal and offer tips!
Retweet
Comments (
Facebook