• Why bother with life insurance

    Why bother with life insurance There’s already enough pressure on your monthly budget and it’s a waste of money, right?

    If you’re single, child-free and have plenty of money in your bank, you probably don’t need life insurance. But for everyone else, it could be a very wise move.

    Think about it this way…

    You may ask yourself if you can afford life insurance. But here’s a more important question: can you afford NOT to have life insurance? If the unexpected happened, how would your loved ones cover the bills, mortgage payments, childcare costs, everyday expenses and funeral costs?

    You’d be forgiven for thinking that insurance doesn’t always feel worth the money. After all, when it comes to car insurance, you pay every month and may never make a claim. But life insurance is different. That’s because death is inevitable (whether we like it or not), so if you die while your life insurance policy is in force, there’ll always be a payout.

    So who should think about life insurance?

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    Anyone who brings in an income that others rely on

    Breadwinners

    If you’re the main earner in your household, life insurance means your family would have a payout to help replace your income.

    Double income households

    Whether or not you have children, if you are reliant on two incomes to cover your outgoings and lifestyle, then you might both want to consider life insurance.

    Anyone whose hard work would have to be replaced – at a cost

    Stay-at-home parents

    It doesn’t bear thinking about, but if something happened to you, your partner may have to reduce their hours to look after your children - or pay someone to do all the things you do. On the average day, you’re probably a teacher, nurse, cleaner, chef and driver, so covering these jobs would be expensive. This is where life insurance can really come into its own.

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    Full-time carers

    If you care for an elderly relative, or for someone with a disability, who’d look after that person if you died? Although no one could ever replace you, a life insurance payout could ensure the right care could be put in place.

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    A couple or family in rented accommodation

    Renters may assume life insurance isn’t relevant to them. But if the main earner died, the rent would still need to be paid, or your family or partner may have to move. Life insurance could help them to continue living in your family home and without any further upheaval at a very difficult time.

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    Types of life insurance

    Term insurance

    With this type of insurance, you decide how long you’d like to be covered for. If you died within this time frame, the policy would pay out. You can also choose how much you’d like to pay each month, or the amount to be paid out when you die. What’s more, you’re covered from day one.

    Whole of life insurance

    Whole of life insurance tends to be the more expensive option, because it covers you for the rest of your life, paying out to your beneficiaries whenever you die. Whole of life insurance with no medical is more affordable, but the cash payout is much smaller.

    What else could I do?

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    You might be considering these alternatives to life insurance.

    Saving

    You could put money aside in savings. The problem here is that you don’t know when you’re going to die (unfortunately, this is the one thing beyond our control) and your savings may not have had the time to accumulate sufficiently.

    This means there might not be enough to cover expenses like the mortgage, bills and funeral costs.

    Selling assets

    It’s possible that your loved ones could sell the house to help cover costs. But that would mean having to leave the family home at an already upsetting time. It can also take several months to sell a house and your family may need the money more quickly.

    Life insurance really can help financially at a difficult time

    So, put simply, unless you’re single, carefree and have no dependents, or you’ve recently won the lottery, it’s worth thinking about taking out life insurance.

    It can give you peace of mind knowing your loved ones will have some financial security if the worst happened; and it doesn’t have to break the bank. Premiums are available for under £10 a month and the sooner you start the better the deal you can get. And remember, even if you can’t afford to cover everything you’d like to, a payout of any size will be a great help to the people who mean the most to you.

    If you’d like to know more about life insurance, take a look at our life insurance explained article or our try our life insurance calculator to see much cover you might need.


    SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, life insurance, pet insurance, ISAs and Will writing services.