In 2013, British families benefited from payouts of over £1 billion on the most basic type of life assurance. Thousands of families have been the recipients of a payout in the event of the death of a loved one, allowing them to meet their financial commitments at a difficult time.

If you haven’t arranged any life insurance, now is the time to consider doing so. The benefits are huge: indeed one expert has called life cover ‘the best £7 a month you’ll ever spend’. Keep reading to find out more.

Why you should consider life insurance

If you have a family, financial dependents or debts then arranging some life insurance should be a high priority. Without any cover, how would your partner or children support themselves financially? How would they manage your debts? And how would they meet your funeral expenses?

Many millions of people have no protection. And, if you think that life cover isn’t important to you, consider this fact:

“If you filled Wembley Stadium with 90,000 men aged 25 to 34, by the end of this year, 74 of them would be likely to die. If the crowd was aged 45 to 54, 322 would be likely to die.”

One of the main reasons to buy life insurance is because it is cheap. The Daily Mail reports that a 30-year-old can get a £100,000 policy for £6 to £7 a month through a range of insurers.

Mail journalist Tony Hazell calls it ‘the best £7 a month you’ll ever spend’.

As well as being cheap it can provide essential financial support in the event of your death. The Association of British Insurers (ABI) have reported that in 2013 more than 25,000 people claimed more than £1.3 billion on the most basic form of life insurance.

Many of these people will have been paying just a few pounds a month and the average payout was £51,500.

The Mail reports that if you add in claims on more complex policies, such as those that pay out when someone is critically or terminally ill, the figures rise to more than 86,000 policies paying out almost £3 billion.

Choose the right type of cover for you

When shopping around for life insurance there are a number of factors you should consider:

  • How much cover you need
  • When you want your cover to pay out
  • Whether you want the cover to pay a lump sum or a regular amount
  • Where you buy your cover from

Working out how much cover you need is sometimes hard as you may want to repay a mortgage or other debts as well as providing a lump sum for your partner or children. There are also various different types of life cover to choose from ranging from basic policies such as term assurance to more complicated types of plan.

Life insurance is available by phone, directly from an insurer or via comparison sites on the internet. Many comparison sites have a range of resources to help you choose the right cover for you.

Life cover can give you a regular income

While most life insurance policies are designed to pay out a lump sum it is possible to set up cover to provide a regular income until a specified date in the future.

Family Income Benefit (FIB) is a type of life protection designed to pay out a regular income until a date of your choice. For example, you may wish to provide an income until your children reach the age of 18 or 21.

FIB can give you a steady, inflation-linked income on the event of your death but the downside is that if the person insured dies one month before the end date you will get only one month’s payment. With a standard term assurance policy you would receive the whole sum insured.