Get a life!

Ten reasons to take life insurance

1. If you have anyone else depending on your income, then you probably need life cover – so pay attention, parents.

2. Life insurance (also called term insurance) is simple cover: all it does is pay out a lump sum if you die during the term of the policy. And it’s cheap. You could pay less than £10 a month for £100,000 of cover if you are a young non-smoker.

3. You can have a policy which keeps the sum assured - the amount of cover - the same throughout the life of the policy (level term) or you can have one where the sum decreases (this is often sold alongside mortgages as the amount of money outstanding on the home loan goes down over time).

4. Rather than a policy which pays out a lump sum, you could choose family income benefit which pays an income to your surviving spouse for the remaining term of the plan. It’s even cheaper than standard life cover.

5. You can buy life cover from brokers, banks or even supermarkets. It really does what it says on the tin – so the cheapest can be best (check out a comparison site for deals).

6. You don’t need life cover if you have no dependants. And if you’re a member of a company pension scheme, you’ll have death in service benefits. Like life cover, this pays out if you die while you’re employed.

7. Life cover premiums are based on age (younger people pay less); health (you have to declare pre-existing conditions and if you’ve had a serious illness you could be refused cover or charged more) and lifestyle choices (smokers pay more).

8. There are exclusions on life cover. Insurers may not pay out if your death is due to drugs, suicide or if you are killed taking part in a dangerous activity.

9. Often you can add critical illness cover to life cover. This kicks in if you’re diagnosed with a serious condition. See our guide to medical insurance here.

10. Whole of life insurance is also life cover but without a term and with an investment element. It’s usually sold to older people, sometimes as a method of paying funeral expenses or inheritance tax bills. Take advice before buying it - you may put in more than you get out. Click here for our guide to getting financial advice.

 

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Last updated 22 August 2017