The Importance of Having Family Life Insurance

tips_to_have_a_happy_familyAccording to research, 22 percent of families with dependent children admit they will have immediate trouble meeting everyday living expenses, and another 26 percent can cover expenses for only a few months if a primary wage earner dies.  Once you have dependents who rely on you financially, it is important to consider having family life insurance plans.

In the event of your death, life insurance can give your loved ones the funds they need to continue on with their life. It can be used to pay off the mortgage on your family’s home, pay monthly bills, provide a college education, or just be there as a safety net.

Couples often take out joint life insurance to cover both lives. A joint life insurance policy is convenient and can be cheaper, but it is important to remember that it pays out only on the first death. If the survivor then wants to arrange his or her own life cover, it will almost certainly be more expensive because of the increase in age.

It is worth comparing the cost of joint and two single life policies as it often does not cost much more to take out two separate policies, especially if one of you is older or in poor health. A joint life policy will only be issued if each partner has an ‘insurable’ interest in the other – which essentially means that the death of either partner would have a negative financial impact on the survivor.

The amount of cover you need depends largely on your personal circumstances and your budget. If you have several young children, for example, you may need more cover than someone with one older child. The size of your mortgage can also help to determine the size of the sum insured. Check, too, whether you have any existing cover.

For example, your employer might offer death-in-service benefit, which could pay a lump sum of around four times your annual salary if you were to die while still employed by the firm. You should include any potential death-in-service pay-out when determining how much insurance you need to buy.

Premiums vary from insurer to insurer so you should always shop around for the best deal. You can find details of hundreds of different policies from the country’s leading insurers all at the click of a mouse.

For more information, check out our rates!