Life insurance can be an excellent investment, especially if you have a young family and you are worried what they would do – and, most importantly, how they would pay the bills without you? Many people type in ‘what is the average life expectancy‘ to google to check the statistics for their area. It’s always good to have an idea of what the people are more prone to in your area and whether they’re healthier or less so than other places. It might say something about pollution/healthcare access/ environmental issues etc.

No one wants to think about the possibility of dying early, but you never know when disaster will strike. Life insurance can give you peace of mind that your loved ones will be looked after in that worst case scenario. Quite simply, it is one of the best forms of protection you can buy for your family. You can click here to take a look at one company’s offerings, including a range of policies to fit different types of people and their individual needs. There are many companies like this so make sure you pick well based on what is best for you.

Why Invest in Life Insurance?

Have you ever sat down and thought seriously about what would happen if you died? Importantly, have you thought about what your family would do if you and your income were no longer around? Would they be able to continue paying the mortgage, school fees and other expenses? This is the main reason why people take out life insurance, though research has shown 1.5 million households have NO cover.

Billions of pounds are paid out in life insurance every year in the UK. According to the Association of British Insurers figures quoted in this This Is Money article, more than 25,000 people made a claim on the most basic form of life insurance in 2013, claiming a total of 1.3 billion.

In addition, life insurance is not particularly expensive. If you are 30 and in good health, you can expect to pay a premium of just a few pounds a month, although prices differ, depending on the provider you choose.

Types of Life Insurance to Consider

A number of life-insurance products exist, and you may want to look into these before deciding on the best option for you and your family.

Term insurance is the most basic type of coverage, and this pays out an agreed amount of money, if you die before a certain date. You simply pay the premium each month, and, if you die, the insurance should pay out.

Another popular type of insurance is decreasing term insurance. With this insurance, the amount of cover goes down over time. This tends to be less expensive, and it can be useful if you want to get covered for your mortgage.

Whole of life cover is more typically sold to older people who may want to becovered for the costs of a funeral or for inheritance tax purposes. This type of cover simply pays out when you die, rather than providing cover for a specific period of time. Despite being more common for older people, it is usually available for younger people, too.

Index-linked life insurance is where the payout rises with inflation, so this may be another factor to consider.

Family Income Benefit (FIB) is a type of cover that pays out a regular income until a specified date after you die. One possible problem is that if you die just before the date of the cover comes to an end, you will get only a small payout rather than a large lump sum.

Factors to Consider when Buying Insurance

When you buy insurance, first you need to think about how much coverage you actually need. This is often the most difficult part because you may not know the actual figure your family would need to avoid financial difficulties. You may want the amount to cover your mortgage, university fees, childcare costs and other expenses. If you are unsure what you need, you may want to use the services of an independent financial adviser who can work out the amount of coverage you should get.

You should also consider the circumstances under which you would want the insurer to pay out, and whether you want a gradual payout or a lump sum.

You may want to look into the possibility of the premiums rising. Sometimes there is a clause that allows for the insurer to review the premiums and increase them every few years.

Another thing to think about is whether you want a separate policy or a joint policy for you and your partner. Joint policies could be cheaper than two separate policies, but only one payment will be made if you both die. With separate policies, two payments will be made if you both die.

Life Insurance Added Extras

When purchasing life insurance, there are a number of extras that you may want to consider. For example, many policies will pay out if you get a terminal illness. In addition, add-ons are often available for critical illnesses such as cancer that may not necessarily be terminal.

A waiver of premium may also be available. This will cost extra, but it will make sure your premiums are paid should you lose your job or be unable to work for other reasons. However, there is usually a period of a couple of years before this takes effect.

Start Thinking About Life Insurance

If you have not thought about life insurance in the past because you thought it was an unnecessary expense or because you thought it was too expensive, it may be time to give it a second thought. Only you can decide whether it is right for your circumstances, but if it provides you with peace of mind, it may be worth considering.

Look over the different types of insurance available, and compare products on the market. If you want to get specialist advice to work out how much coverage you need, you may want to consider the services of a financial adviser.

If you do decide to purchase coverage, always be honest about your health and your lifestyle. The whole point of life insurance is to make sure your family will have access to funds if you die, so don’t risk this and lie just to get a lower premium.