Financing your family’s future with life insurance
Ask your kids what their superhero power would be and they’ll probably tell you they want to fly, be invisible or shoot flames from their eyes. As an adult, something a bit more practical like being able to predict the future would be pretty awesome. Unfortunately this isn’t likely to happen (no matter what Derren Brown tries to tell you!) but what we can do is to plan for the future to make sure that our family is protected.
Life insurance is one way of giving your family protection. Life insurance is a form of financial cover that will pay out a lump sum to your loved ones after you die. The majority of life insurance plans (and the most affordable ones) are for a fixed period of time, only paying out if you die within the length of the cover. Other plans are available that will offer a guaranteed payout whenever you die, although this can be much more expensive.
Why you need life insurance
As well as the sadness that the death of a loved one brings, it’s common for families to experience financial difficulties if they don’t have a contingency plan in place. Life insurance can protect your family in a number of different ways:
Cover funeral costs
Did you know that the average cost of a funeral is around £3700 for a cremation and an extra £1000 on top for a burial. Depending on the type of service you are after, costs could soon escalate. Some life insurance providers offer specific funeral savings plans to help cover these costs.
Replace lost income
If you are the main breadwinner of the household, the loss of your income could have a huge affect on your family’s financial wellbeing. A lump sum payout could help to offset this loss of income, giving your family the chance to maintain their standard of living without falling into financial difficulties.
Pay off debts
One of the main reasons that people take out life insurance is to cover their mortgage payments. Without life insurance, your family could be left with the burden of expensive monthly repayments, which if not met could leave them at risk of losing the family home. Term life insurance often runs alongside the term of your mortgage to ensure that if the worst should happen, the remaining debt can be paid off.
Peace of mind
Thinking about life insurance now can give you enormous peace of mind, knowing that your family’s long term future will be safe from financial burden. You could also save money by sorting out your life insurance sooner rather than later. If you can take out cover whilst you are young and healthy, it’s likely to be more affordable.
Who is life insurance suitable for?
As mentioned above, life insurance can help to cover the loss of income for working policy holders however if you are a stay at home parent, it’s also worth thinking of a life insurance plan. You may not be paid a salary but the services you provide to your family are extremely valuable. Just think what it would cost to cover full-time childcare during the school holidays, transport, cooking and cleaning.
If you’re looking to ensure that your family are looked after in the event of your death, then speak to a life insurance specialist today to find out more about a suitable insurance plan.