Life insurance and critical illness cover are designed to help protect your loved ones’ financial future should the worst happen to you. But how do you decide when the time is right to take it out and which type is the best life cover for you?
As we go through life, our circumstances change and things happen that we may never have predicted – some good, some not so good. Here are 10 of the most common life moments that can make life cover a priority.
1. When you start a family
With children comes the moment we realise that others are wholly dependent on us. If one parent dies, the financial burden may fall entirely on the surviving parent. Life cover can alleviate this burden and help the loved ones left behind maintain the lifestyle they enjoy now. With term insurance, you can choose how long you want to cover your family for and how much will be paid out.
2. When you want the best for the kids
We all want the best for our children and want them do well in life. Taking out life cover can ensure they’ll have money and resources available to them even if you were no longer there to provide for them; maybe to go on to further education or get a foot on the housing ladder.
3. When you rely on two incomes
When we share our life with someone special it’s natural to worry about their future if we were no longer by their side. Many of us depend on two incomes or on one parent staying at home to look after the children every day. Life insurance can help the surviving partner cope financially, by helping to maintain the family’s lifestyle, pay for childcare, funeral costs and any outstanding debts.
4. When you buy a house
For most of us a new house comes with a mortgage. Could your family keep up with mortgage repayments and maintenance costs without you? Many mortgage providers require you to take out life insurance so that if you died during the mortgage term your policy would pay it off.
5. When you lose someone dear
Losing someone dear is not only upsetting it can also be a bit of a wake up call – a reminder of just how precious life is. Putting off life insurance may mean your loved ones struggling to cope financially if the worst happened to you unexpectedly. Taking out a life insurance policy sooner rather than later can be reassuring because you know a financial cushion will be there if needed.
6. When illness is a worry
According to Cancer Research UK 1 in 2 people in the UK will develop some form of cancer in their lifetime. It’s easy to assume serious illness won’t affect us, but when someone close to us falls ill we see the impact it can have. Critical illness insurance pays out if you’re diagnosed with one of a series of serious medical conditions, to help you cope financially. Critical illness cover can be included with life cover or bought on its own.
7. When your parents need you
As parents get older, it’s often our turn to support them physically and financially, particularly if they get by on a small pension or have little saved. In this situation, how would they cope if they outlived us? Naming parents as the beneficiaries of a policy means if you did die a level of financial support would still be there for them.
8. When there’s a family history of illness
Having a pre-existing medical condition or a family history of illness doesn’t necessarily mean life insurance is not an option. What it’s likely to mean is the cost is higher and cover for any existing illnesses may not be available. With critical illness insurance it’s important to check exactly what illnesses are and are not covered.
9. When getting divorced
Divorce doesn’t necessarily mean the end to the financial commitments held as a married couple, such as the mortgage, car and credit card bills. This is why many divorced couples take out a policy on the person responsible for paying child support in case they die. Term life insurance provides cover for a specific period of time such as until the children become independent.
10. When becoming a grandparent
Becoming a grandparent is a very special moment and grandchildren have a special place in our hearts. Many people take out over 50 life insurance, in order to leave a cash gift as a legacy to their family after they’re gone.