Do you really need life insurance?
At the moment, we’re probably all feeling the pinch and perhaps wondering which areas of our budget we can make cutbacks. Insurance policies are often the first to go when we’re struggling to make ends meet, but can you really afford to cancel your life insurance policy?
What is life insurance?
If you’ve bought your own home, then you were probably advised to take out life insurance at the same time you took out your mortgage. I used to think that life insurance was an essential policy to have as a mortgage holder, but as Future Proof Insurance have clarified,
“Whilst you won’t be legally obliged to obtain life insurance to cover a mortgage, some lenders prefer borrowers to have mortgage protection insurance in place as a precondition to lending.”
Life insurance policies vary and cover things slightly differently, so make sure you do your research before signing on the dotted line. But, in general, a life insurance policy will pay out a lumped sum to your loved ones when you pass away. For homeowners with a mortgage, it’s fairly normal for the value of the policy payout to tally up with the balance of the mortgage, so that should the worst happen to you, your family don’t need to worry about their home being taken away.
Do you really need life insurance?
With the cost of living forever on the increase, it can be really tempting to cut back on monthly payments for things like life insurance. You might be super healthy and expecting to live a long and happy life at the moment, so do you really need to keep paying into that life insurance policy? The Covid-19 pandemic put things into perspective for some people, with the Financial Times reporting that the pandemic prompted 5.8 million people to take out a life insurance policy.
The sad truth is that none of us can predict what the future will hold, and if you want to ensure that your loved ones will be financially ok after you’ve gone, then a life insurance policy is an absolute must. If you were to pass away tomorrow, would your family be able to pay the bills, keep a roof over their heads, and put food on the table?
So, whilst life insurance isn’t something that every home owner must have, it’s certainly worth looking into in order to protect your family in the future.
How much does life insurance cost?
As cost is key these days, it’s worth shopping around in order to get the best quote for life insurance. The actual cost of a life insurance policy can be anything to a few pounds a month, to a few hundred pounds per month, it’s all relative depending on your individual situation.
It can be tricky to navigate all of the different options available, so take your time and do your research before paying for a life insurance policy. The cost of insurance will increase as you get older and the policy payments will be larger for bigger payouts too. Think carefully about the amount you want your family to receive in the event of your death, but make sure that the monthly policy payments are affordable for you too. It can be a tricky balance to achieve.
Conclusion
In my opinion, life insurance really is worth it. It gives you peace of mind that your family will be taken care of financially when you’re no longer around to pay the bills. But take some time to read all of the small print to make sure you’re covered for everything you require, and also make sure your monthly payments are affordable too so that you don’t have to make the difficult decision to end your policy early.
