What are the events that have shaped your life? Becoming a parent, buying a house, losing a loved one or retiring are just a handful of examples. Some of these events are fantastic, some are horrible, and some are a mixture of the two. But, all play a part (for better or worse) in shaping each one of us into who we are today.
Such monumental moments can certainly lead us to evaluate our lives, but what about the life insurance to reflect these changing circumstances? We know, we know…when you’re young, free and single, life insurance is generally the last thing on your mind – it’s a pretty dull subject at the best of times.
Yet, as you grow older, priorities change (even if life insurance is still the last thing on your mind). We get it: no one wants to think about death for too long, but with so many iconic celebrities passing away this year it’s been hard to avoid the subject, and denial isn’t really an option. Regularly reviewing your plans will help ensure they reflect your ever-changing life, so here are five key stages where you should think about checking your insurance cover.
1. Getting on – or climbing – the property ladder
Hearing the jangle of the bunch of keys to your new home is undeniably exciting. However, once you’ve found your sensible hat amongst the cardboard boxes, it’ll hit home that a mortgage is probably the biggest debt you’ll ever take on – so your insurance needs to reflect this. Details to check include whether your current mortgage is fully covered by life insurance, and whether it’ll be paid off in the event of you or your partner's death. If anything happens without such cover, the mortgage debt would be compared with the value of your estate and if you owe more than the worth of the property, it could be sold or repossessed to cover the full debt.
2. Tying the knot If you’ve recently walked down the aisle, firstly – congratulations!
Now’s the time, though, to protect your partner from any joint risks which can be covered within your life insurance plan. You may want to review what you have in place and see whether it is worth combining your life insurance plans or increasing what you have separately.
3. Welcoming a child (or grandchild) to the world
Amidst the cooing, sleepless nights and general whirlwind that comes with welcoming a new little person into the family, insurance probably isn’t on your mind right now. However, earlier in the year The Guardian reported on a study, conducted by LV* , that revealed the cost of raising a child stands at more than £230,000. You may want to consider building in other expenses such as childcare, food, clothing and – admittedly hard to imagine when they’re still in nappies – driving lessons.
4. A shift in career
A career will often bring its fair share of highs and lows. From promotions to redundancies, what happens at work will affect how much you can afford and how much you want to insure. Many employers offer a ‘death in service’ benefit, meaning a lump sum is paid to your loved ones should you die while employed by the company. If you change jobs and your new employer doesn’t offer this benefit, you may want to replace the cover you have lost.
5. Putting your feet up – retirement
By the time you stop working your children may no longer rely on you (financially speaking, that is). However, if your partner or grandchildren still depend on your income then be sure to not act too hastily. Review what you need in terms of life insurance and ensure you have appropriate plans in place.
We can’t predict what the future holds – but we can make decisions to minimise the risks. Life is always going to be full of surprises – both good and bad – so it’s important to plan wisely. Life insurance isn’t something you can take out and then forget about; like many things in life, it needs to be nurtured, cared for and respected.