Life Insurance
Who Pays The Bills When You Are Gone?
Right, let’s get straight to the point: talking about life insurance isn't exactly what you'd call a thrilling topic. You’d probably rather be reading about a nice holiday or watching cute cat videos. But stick with me—this matters.
Life insurance is one of those things you often don’t know you need until it’s too late. It’s not about you, after all. It’s about making sure the people you love aren't left scrambling around, financially lost, when you're no longer around to help.
Think About the People You Care About
You might be wondering, "Do I really need life insurance?" Fair question. Here’s the simple test:
Do you have a partner, children, or others who depend on you financially?
Do you have a mortgage or significant debts?
Would someone struggle financially without your income?
If you've nodded to any of those (even reluctantly), it's probably time to consider life insurance.
Breaking Down the Basics
Life insurance comes in different flavours, but here's the quick UK-friendly rundown:
Term Life Insurance:
This one's straightforward—you choose a policy length (say, 20 years), and if you die during that term, your family gets a payout. If you're still alive after the term? Brilliant—you’re still alive! (But the policy ends with no payout.)Whole-of-Life Insurance:
Exactly as it says: covers you your whole life. There's no expiry date (well, aside from yours). Generally pricier, but guarantees a payout eventually—perfect for leaving money behind no matter when you go.Mortgage Life Insurance (Decreasing Term):
Designed specifically to pay off your mortgage. As your mortgage shrinks, the cover shrinks too. Practical, affordable, and peace of mind that your loved ones won't lose the roof over their heads.
Cost of Cover: Let's Talk Numbers
Life insurance costs vary, and your health, lifestyle, and age make a difference. Let’s use an example:
Non-smoker, age 35, healthy, £100,000 of term cover (20 years): around £7–£10 per month.
Smoker, same age, same cover: typically double the cost (£15–£20).
It’s blunt, but that’s life insurance maths for you. Health matters; age matters even more. The earlier you buy, the cheaper it is. Simple.
How Much Cover Should You Take Out?
"Right," you say, "I’m sold. How much should I get?"
Think practically:
Mortgage: How much do you owe? Add that.
Dependents: Got kids or a partner relying on your income? Multiply your annual income by 5–10 years (depending on age and your family’s needs).
Debts: Car loans, personal loans, anything you wouldn't want others saddled with.
Extras: University fees for your kids, funeral costs, or a legacy gift.
Adding this up will give you a ballpark number. Don’t panic if it feels high—policies are generally cheaper than you think now that we're all living longer.
(Handy tip: Watch this space—I might add a calculator later so you can play around with these numbers easily.)
Don't forget: Trusts
If there's one extra tip I insist on mentioning, it’s this:
Put your policy in trust. This simply means that when you die, your loved ones receive the payout quickly, easily, and—best of all—tax-free (at least, at the moment). Almost every reputable insurer in the UK can help you do this for free. Don’t skip it.
The Slightly Awkward Conversation
Nobody enjoys confronting mortality (even the insurance brokers pretend it’s not happening). But honestly, a quick uncomfortable chat now can prevent a lifetime of financial hardship for the ones you leave behind.
Besides, think how smug you’ll feel knowing you're organised enough to tick this big life-admin box.
Next Steps: Making It Happen
Ready to get started? Here’s how:
Shop around: Use trusted comparison sites like Compare the Market or MoneySuperMarket to find deals.
Speak to a financial adviser if you’re unsure or your needs feel complicated—find one through Unbiased or check with your bank or building society.
Read the small print, make sure you understand exactly what’s covered, and be honest on applications (no fibbing about the cheeky cigarettes on holiday).
Peace of Mind is Priceless (Well, Almost)
At its heart, life insurance is really a simple act of kindness. You're saying clearly, "I've got your back—even if I’m not here." And there’s something genuinely comforting in knowing you’ve made life a bit easier for the people you love most.
After all, life’s uncertain. You can’t control the future—but you can certainly protect the ones who mean the most to you.
So pour yourself another cuppa, pat yourself on the back, and start sorting this one out. Your loved ones (and your peace of mind) will thank you later.