Nobody likes to think about how their family would cope financially without them, but ensuring that the people you love would be provided for if the worst were to happen can provide great peace of mind.
Taking out life insurance is one way to make sure that your family would not have to worry about their finances at an incredibly difficult time.
Many people think that life insurance is really only important if you are the only breadwinner – or if you don’t have any savings that your dependents could fall back on. But the reality is that most of our families have outgoings that would continue if we weren’t around to contribute to them.
Here are some of the reasons why your family might need support if you were to die.
To pay the mortgage
For most of us, paying for the roof over our heads is a priority. With mortgage terms gradually becoming longer, meeting a monthly mortgage payment is something that will preoccupy many people for most of their lives. Life insurance can ensure that the mortgage is paid off with a lump sum, or that the family receives a monthly income that would cover the mortgage payment.
To pay for childcare
The cost of someone caring for your children so you can go out to work is rising. According to the Family and Childcare Trust, the average cost of a part-time nursery place is now £116 a week. It is really important to work out how you would pay for childcare if either parent was no longer around, since even if one of you is currently not earning and taking care of children, there would be childcare to consider if the stay-at-home parent passed away.
To pay for education
Whether it is private school fees for younger children with many classroom years ahead of them, or help with tuition fees for university, education is a major factor when families are weighing up whether they will need life insurance. If you have any of these commitments, you should consider how they might be met without your income and, if they could not, think about the best way to protect against your children losing their school place or university funding.
To support your own parents
We are all familiar with the phrase ‘the sandwich generation’, with many of us in the middle of our lives supporting both young children and older parents. If that’s you, then it’s important to consider how your parents’ needs might be met if you weren’t around. If they would need paid carers or a supplement to a small pension, then this should be part of your calculations.
For day-to-day life
Living is expensive, and fewer and fewer families get by on only one wage. A life-insurance policy gives you the peace of mind that, if one family member was unable to provide, there would still be money for all the bills that come in each month.
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