When should I get life insurance?
Life happens, so it’s important to make sure your life insurance reflects your changing circumstances…
Life insurance is there to provide financial security and peace of mind for your loved ones – in the form of a cash lump sum - should you die or become critically ill.
But as your circumstances change, so should your life insurance. Here are five occasions when it’s worth checking your level of cover is still appropriate for your needs.
1. Climbing the property ladder: Do I need life insurance for a mortgage?
One of the most common reasons for buying life insurance is to ensure that all or part of your mortgage would be paid off in the event of your death. Many lenders will also stipulate that you must have a life insurance policy in order to get a mortgage.
It’s important to check that your current mortgage is covered by the ‘sum assured’ (the guaranteed amount you would receive in the event of a life insurance pay out).
2. Getting married: Is it time for joint life insurance?
You don’t have to be married to be eligible for joint life insurance, but marriage is often a time when couples start thinking about their future plans and this includes life insurance.
If you’re getting married, you may want to review what cover you have in place and see if it is worth buying a joint policy (which may be cheaper) or increasing what you have separately.
3. Life insurance when starting a family
If you’re starting a family, insurance may not be at the forefront of your mind, but it’s an important time to check your cover.
The average cost of raising a child in the UK is estimated to be between £150,000 and £200,000* (including food, housing and childcare). If you want your life insurance to also cover living expenses, you may need to increase your sum assured. You may also want to consider if you want your level of cover to increase to protect yourself against increases in the cost of living.
4. Changing career – what about death in service?
If you have moved company, find out if you have a ‘death in service’ employee benefit. This pays out a tax-free lump sum if you are employed by the company at the time of your death. If you previously had this and no longer do, you may want to adjust your cover accordingly. Even if you do have death in service benefit, it’s important to understand that’s it not the same as a life insurance policy.
5. What happens to life insurance when you retire?
By the time you stop working, your children may no longer depend on you financially . However, if your partner or grandchildren still depend on your income, life insurance may still be necessary.
If you’re close to retirement, it’s worth reviewing your level of cover to ensure you have appropriate plans in place.
Want to review your cover?
If you want to check if you have the right level of cover in place, or want to explore your options further, try our life insurance calculator or find out more about Zurich life insurance.
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