How are you fixed for life insurance do you have enough? The answers probably no, as there s evidence that there’s a very big shortfall between the amount we have and what we really need. So even if you’re fairly up to date with your requirements, you ll probably need more before very long. If you don t keep up to date with it all, you could end up being severely under insured.
Some of the key times in your life when life insurance crops up are covered here, but obviously everyone s lifestyle is different and not everything will apply to you personally. One of the first events is when you take out your first mortgage. If you’re sharing the mortgage with another person you at least need to ensure that they won t have responsibility for the full debt if you die.
That covers your mortgage, but is this your only debt? You may have other debts outstanding, such as credit card balances and any other loans which you wouldn t want your family to have to deal with. If you marry or enter into a civil partnership the chances are that you ll share the financial aspects of your lives too. If you’re relying on each others incomes to pay all the expenses, you should have life insurance to cover these in the event of your death.
Once you start a family you ll become aware of the cost of bringing up a child. This cost would remain the same even if you weren t around to provide it so you ll need sufficient insurance in place to ensure this is possible. Life insurance is just as necessary if you ve given up work to become a full time parent. Just imagine how much it would cost for childcare and the cost of running the home if that parent died or how the surviving parent would cope financially if they chose to give up their work and look after the home and family. The more children you have, the more the cost, so don t forget to increase the insurance cover from time to time.
Bigger families often mean bigger homes again if you move to a large, more expensive property, which incidentally will cost far more to maintain, you need to up the insurance again. As you rise up the ladder in your career, you may find you re living a more affluent lifestyle, with maybe a second home or private education for your children. Yet another reason for upgrading your life insurance policy to cover the family in this lifestyle.
You may have death in service benefit via your employer, which could pay a lump sum to your family if you died. It could be three or four times your present salary. This may be a big help, but it s nowhere near enough to keep them for very long. Whilst it s not a benefit to be ignored, there is no allowance for changes in circumstances and will almost certainly need to be topped up. If you change your job and the benefit is not available in your new one, you ll lose the cover and nowadays not all jobs are for life.
It s not all about increasing your cover, though. As the family grow, you may downsize to something more suitable to your new needs. Your need for insurance will lessen too, once the children are independent. Time, again, to re assess your needs. As important as this cover is throughout your lifetime, there s no need to keep paying for cover that you no longer have need for. Just cater for the needs of your dependents and make sure that you don t leave any financial headaches for them.
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