Things to think about

These questions should help you consider whether life insurance is right for you. Everyone’s needs are different, and not everyone needs life insurance cover.

Who needs life insurance?

It’s all too easy to think, 'It won't happen to me'. But of course, the one certainty in our lives is that we will die and it can happen unexpectedly. If that happened would your loved ones be left facing financial difficulty? If they rely on your income to cover their living expenses or the mortgage, then you probably do need life insurance.

For some people, life insurance may not be required. For example if you’re single, or your partner earns enough for the family to live on, including any extra childcare costs, if they were suddenly alone. However, if you’re in any doubt you should seek advice from a financial adviser.

Some people are covered by a ‘death-in-service’ policy at work. It’s a lovely extra to have. If you’re lucky enough to have an employer who provides this cover it’s still worth keeping in mind that you can’t 100% rely on it as you may not always stay in the same job.

You might also want to think about setting up a savings plan, to give you access to some cash for any unexpected emergency.

How much life insurance cover do I need?

You’re probably the best person to answer that question. Think about any debts that would need repaying, and how much your dependents would need to maintain their lifestyle if you died during the policy length.

Also check to see if you have any cover in place already, perhaps through a work scheme. The shortfall between the cover you have and the amount your dependents will need shows you how much cover you should put in place.

You can use our simple Life Cover Calculator to see how much cover you might need.

How long do I need cover for?

Everyone’s needs are different. You might just want to arrange cover for the length of time your mortgage has left to run. So you can relax knowing it could be paid off if you died during the policy length.

Alternatively, you might want to make sure that your dependents will be provided for longer term. So if you have young children, for example, you could take out a life insurance policy that will last until they become financially independent.

What will affect the cost?

There are lots of factors that can affect the cost of life insurance. The good news is it’s probably less expensive than you think. Here are some things to consider:

  • Your age – the earlier you take our life insurance, the less expensive the premiums are likely to be.
  • The length – how long you want cover to last will affect the price. A longer policy is more expensive.
  • Your health – for example, if you smoke or if there’s a history of heart disease in your family, it will cost you more.
  • Your choices – the type of cover you choose might affect the price. Different providers cover different sorts of illness and include different options. Make sure you check that the options are what you need before you take out cover.

Honesty is the best policy

Insurers will ask about your health and your family history when you apply. Make sure to answer the questions honestly. If you say you don’t smoke and you do, for example, the insurer can refuse to pay out if something happens to you.