The 5 types of people who need life insurance – are you one of these?

In this modern age, we’re often quick to make sure our car, house, and pets are insured. But, what about insuring the one thing that is most important – ourselves?

Research by Cirencester Friendly in 2020 found that twice as many people would insure their pets over themselves, and that far more people were likely to have mobile phone insurance than life insurance.

If your phone is lost or damaged and you are not insured, the worst-case scenario is that it costs you a few hundred pounds for a repair or replacement. However, if something happens to you, your family and dependents could end up having to move out of their home, be unable to pay their bills, and face an uncertain future.

Putting the right life insurance in place gives you huge peace of mind. And, you will often find that the cost of life insurance is less than you expect. Depending on your age and health it can be cheaper than insuring your smartphone or your terrier, so it’s certainly something you should consider.

At I’m Insured, we’re specialists in getting the right life insurance at the right price. We would normally suggest you considered putting some life insurance in place if you belong to one or more of the following groups.

 

1. You are a parent

Your main responsibility as a parent is to ensure that your children are looked after and provided for financially. This shouldn’t change even if the worst happens to you.

You probably have big plans for your children and want to ensure that they can live the very best life. But, would they be able to achieve their ambitions if you were to pass away? Would it be possible for them to carry on living in the family home? Would they still be able to go to university or college, or buy a home of their own?

Making sure you have sufficient life insurance in place is vital if you are a parent. It means that a lump sum will be available to provide financial support when you are no longer around. You can even put your life insurance in trust, enabling you to nominate people you trust to look after the money and to make sure your wishes are carried out.

 

2. You own your own home

If something happened to you, would your partner, spouse, or family be able to maintain the mortgage payments? Would they have enough income coming in to be able to afford to remain in the family home?

If not, it is vital that you ensure you have enough protection in place to pay off any large debt you are responsible for – such as a mortgage.

If you bought a home jointly with another party, it is sensible to have life insurance in place to protect both owners from the loss of the other party's income. 

There are cost-effective ways to protect a mortgage. For example, if you have a capital and interest (repayment) mortgage, ‘decreasing term assurance’ policies are specifically designed to pay off any outstanding mortgage balance in the event of your death.

Making sure you have the right cover in place means you benefit from the peace of mind that your spouse, partner, or family can remain in your home if you are no longer around.

 

3. You are in a relationship where you share finances

If you are married or in a civil partnership, or you have a partner, your lifestyle may very well be based on your joint income. For example, you may share the rent, mortgage, or bills. You may also have a joint account that you both contribute to from which your regular expenses are paid.

If you do manage your money jointly, how would your spouse or partner cope financially if something happened to you?

Even if you are not the main wage earner in the household, would your partner be able to manage all the expenses on just their income if you were no longer around? For example, they may face additional cots such as childcare on just one income.

If you are part of a couple who are financially dependent on each other, it is a good idea to make sure a lump sum is available if something happens to you. This financial injection can replace your income and provide useful support at an already stressful time.

 

4. You don’t want to leave your family out of pocket if you die

Even if you are a single person with no dependents, there may still be a need for you to put some life insurance in place. Leaving debts or financial issues for your next of kin to deal with on your death could inadvertently put them in a vulnerable position. For example:

• You may have credit cards or other debts that will need to be paid when you are no longer around
• You may want to ensure there is a lump sum available to pay for your funeral, and for your next of kin to pay any legal or other bills that arise on your death
• You have an extremely valuable estate, and you don’t want your beneficiaries to lose a large portion of it to Inheritance Tax.

 

5. You own a business

As well as replacing your income and repaying your debts, it is also sensible to have enough life insurance in place to protect your interest in any illiquid assets, such as a business.

If you are a business owner, you may have spent years investing money in your company. It may have taken time and effort before you could draw an income. It can be even trickier to extract any value that you have built up in your enterprise by turning it into actual pounds and pence. 

So, if you pass away, you may want to be sure that your estate receives the value of your life's work. Without life cover in place, your beneficiaries may instead inherit a share of a business which, while valuable, may not have enough liquid assets to enable them to pay bills or maintain things like mortgage payments. All your money could be tied up in the company.

Also, your death could present a challenge if you have a co-owner, partners or there are other shareholders in the business. For example, if you were to die unexpectedly, it could significantly affect the running of the business, and harm your team’s ability to perform their duties as normal.

 

Get a life insurance quote today

As we have seen, there are lots of types of person that would benefit from having life insurance in place. So, it is a concern that, when asked, individuals are more likely to protect their dog or the phone in their pocket than their loved ones.

As life insurance experts, we work with many of the UK’s leading insurers and we can obtain the life insurance cover you need at the best possible price. Indeed, we intentionally take a lower commission than the standard rate, meaning you get a discount on your premium.

Comparing life insurance quotes and applying for cover is quick and easy. Just complete one simple online form and we’ll do the rest.