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Today I want to talk to you about something pretty close to my heart, life insurance. You might wonder why I feel so strongly about life insurance but that is because I am currently uninsurable. No mainstream life insurance provider will insure me, as my health makes me a high risk of sudden death. Charming! There are companies that specialise in insurance for people like me but the monthly payments are so high. This isn’t great, however, I’ve made provisions for my family and they can afford to go on without me should the worst happen. My wonderful husband has life insurance, at a very low cost, so today I want to talk to you about the benefits of having life insurance – why you need life insurance!
Why you need life insurance
Just to say at the start I know that talking about life insurance is maudlin, however, most of us know of someone or someone who knows someone, who died unexpectedly. I had a friend who caught a cold, which escalated, and sadly two weeks later she had passed away, at just 40. This was shocking to me and was the time that I really began to think about my financial situation properly. A few years have passed now and our financial situation is brilliant, but there is still never a ‘good’ time to die is there!
Protection for your family
Whether your family consists of a spouse and children, just children or just siblings/parents it is still your family. If you have somebody that relies on your financially, even sporadically, then you need life insurance. In our family, my husband was once the sole earner. This meant that if he passed away I would be left having to find a job desperately. While our situation has changed since my husband first took out life insurance it is still nice to know that your family is covered financially, should the worst happen.
The funeral that you want will be covered
If you have a specific funeral plan in mind I would say two things here. One – have a will and write down your wishes for your funeral alongside it. Our will starts that we both wish to be buried and that is it. The arrangements are left to the surviving spouse, or family member, as they see fit. However, some people feel very strongly about specific parts of their funeral. If you are somebody who has a fairly expensive funeral in mind (the lowest I’ve seen is £3,500 recently!) then life insurance can help with this. While it can take time for a payment to be made it means your family know that they have the money coming. Funeral directors, at least here, typically work on a bury now and invoice later process.
You can get critical/terminal illness cover
If you were to find out that you had a critical/terminal illness then your cover may pay out early. This is dependent on the policy but my husband’s one has a 3% deduction if you claim before death. Typically a terminal illness is one where you are expected to pass away within 6 months. If my husband was unwell, and near the end of his life, this money would be useful for creating final memories together. Obviously, this isn’t something that I want to think about much but it is something to have in the back of our mind should the worse happen.
There are different cover types to suit all lifestyles
There are a number of different policies available and with the likes of a price comparison website, you can tailor a policy to your needs. If you have a specific amount of money you’d like paid out then you can request this. Also, you can choose various term policies or the whole of life cover too. Personally, I feel that a term policy is of good value, as if you buy one in your 20s you’ll have 25-30 years of cover for around £10 a month on average. This is a brilliant price and just the cost of a couple of drinks each month!
You don’t have to live an ultra-safe life
Looking through the paperwork for life insurance policies we made sure to read all of the terms they send out. There were at least 10 pages of paperwork, double-sided, and it felt quite daunting at first. I was worried that there were going to be numerous conditions and things that were not covered. Things like water sports or fun activities. However – I was wrong! There were no activities uncovered that were legal and safe in the right capacity. This means that we can go on holiday, enjoy skiing or water sports and not have to worry.
It really isn’t expensive for most people
Once we decided that you do need life insurance we started to look at the price. My husband, despite being an occasional smoker, and having a bit of weight on him, is insured for less than the price of a takeaway for two per month. His current policy is around £12 I believe and this is a fixed price for 25 years. This is a really low fee to guarantee the financial security of your family and my husband was pleasantly surprised.
I hope that I’ve convinced you that you need life insurance. My Dad never had life insurance or even a funeral plan. When he died it was a nightmare because he left no money or assets. His funeral needed paying for and even a ‘cheap’ funeral really isn’t cheap. While financially it wouldn’t be the end of the World to me now. Emotionally it felt really rubbish that he never bothered to think about his family.
Questions people often ask:
Is it worth it to buy life insurance?
If your family are going to be in dire straights without you to provide, or you can afford to, then absolutely. If you’re already on the breadline, and that extra £10-£15 a month is not something you can afford then maybe not. However, it is really important to consider the financial position of your family. My family would survive without me financially, as we have savings, but I would still want some extra money for them if I could.
Is it necessary to have life insurance?
No. There is no law. It isn’t necessary, except unless you’re buying a house then it is often a requirement to have life insurance. You can shop around for this though still to save some money.
If you’ve decided that you want to get life insurance be sure to read how to save money on it. You can make some considerable savings with my tips and secure your families financial future.
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