Life insurance is a way of ensuring that your loved ones will not end up in financial trouble if you pass away. Some insurance policies will only pay you settlement if you pass away whilst you are insured. Other life insurance policies will pay you a settlement payment if you either pass away or reach a certain age.
Do You Need Life Insurance?
If you are the primary provider for your family, then you should really consider life insurance. If your family were to lose you, then they would suffer without the income that you bring into the house. On the other hand, you may have a spouse or a partner. He or she may suffer greatly if you passed away, and life insurance will help him or her pay the bills in your absence.
Can You Cover Your Partner On The Same Policy?
In many cases, you are able to buy one life insurance policy and insure two people. If a man and wife are insured on one policy, then if one of them passes away the settlement amount is paid to the remaining spouse. The policy then expires, so if the remaining spouse wishes to re-insure, then he or she will have to take out a new life insurance policy.
Is It Cheaper Using Comparison Sites Or Insurance Brokers?
Sometimes it is cheaper to use comparison sites. Many insurance companies will offer a very good online discount. This is because their overheads are far lower if the policy is bought online. Sometimes it is cheaper to buy life insurance from an insurance broker. An insurance broker will have a lot of contacts and may be able to negotiate a very good premium rate. This is especially true if you are looking to buy a customised insurance policy.
How Much Cover Should You Buy?
That really depends upon how badly your dependants will suffer financially in your absence. If you have a spouse and children, then they may suffer greatly if you passed away within the next few years. Even if your spouse or partner is in full-time employment, he or she may still struggle to pay the bills without the income you bring into the home. If you are the primary income earner then you should consider buying more cover. The settlement amount is going to have to help your remaining dependants pay household bills, pay the mortgage, and pay any other debts.
When considering how much cover to purchase, you may wish to consider how much you can afford to pay in premiums. Do not forget that you are insuring your life, and that you may not pass away until you are in your eighties. Is it really worth paying large premiums and risking putting yourself into debt with your other bills just for life insurance cover? If you are unsure about your future financial situation, you may wish to purchase a life insurance policy that will allow you to miss premium payments.
What If One Partner Is A Stay-At-Home Parent?
In many cases, you may be tempted to insure the life of the primary income earner. This would mean that the stay-at-home parent is uninsured. But, this underestimates the contribution of the stay-at-home parent. Without that person, the primary income earner would need to hire a housekeeper, pay for childcare, and maybe even hire a bookkeeper. In addition, the primary income earner would need to find time to run to the supermarket, the shops, and school open days and teachers meetings. This will probably mean that the primary income earner will have to cut his or her hours at work. There will also be a sharp increase in the amount of time that the primary income earner has off of work because his or her child is ill.