10 reasons you need a life insurance policy

1. You’re self-employed

Being self-employed can bring about so many positive changes to your life, however, it can also mean you are likely to miss out on some of the benefits that come with traditional employment.

One of the best types of life insurance for someone who is self-employed is income protection. This type of cover can be a long-term protection policy that provides monthly payments, typically equivalent to a selected percentage of your income if you are unable to work due to accident or sickness.

An income protection policy can help you pay for everyday essentials if the worst were to happen. With this policy in place, you can make sure you’re keeping up with payments for:

• Childcare
• Your monthly bills
• Mortgage/rent payments
• Your weekly food shop
• Transport costs

Most importantly, with a policy like this in place, you will benefit from that all-important feeling of peace of mind.

2. You recently started a family

Considering settling down and starting a family? Or perhaps you’ve already got a little one on the way? Either way, if children are on the cards for you, then you should be thinking about life insurance.

The average cost of raising a child is getting higher every year. According to a report by Child Poverty Action Group in 2021, the average cost of raising a child to the age of 18 now stands at £160,692 for a couple and £193,801 for a lone parent.* Without any financial protection in place, you could be putting your children’s future at risk. Ask yourself, if the worst were to happen to you, would your children be financially supported? 

3. You’re young and healthy

Instead of asking why you need life insurance when you’re young - question why not?

We aren’t under any illusion that life insurance is at the top of every 18-year-olds to-do list. However, the younger and healthier you are, the cheaper your life insurance premiums are likely to be. The reason for this is that life insurance is assessed based on your health and lifestyle at the time of application.

Therefore, if your health was to change later down the line, and you had kept your initial policy in place, your premium would remain the same throughout your policy.

4. You recently lost a loved one

Losing a loved one leaves a hole in any family. But when there is a major debt left in their wake, it can break families apart.

With the right protection in place, if the worst were to happen, your loved ones could be financially protected with a lump sum. A lump sum pay-out from a life insurance policy can be used to pay for several things, such as:

• Contributing to funeral costs
• Help with the costs of raising a child
• Paying off debts you may leave behind
• Monthly bills
• Paying off the remainder of your mortgage
  
  

5. You rent the property you live in

There’s a common misconception that there is a certain set of criteria that you must meet to get a life insurance policy. The truth is, you don’t need to have a mortgage, children and a full-time job to be able to get cover.

For example, if you rent the property you live in, you could still benefit from having financial protection in place. If the worst were to happen, your loved ones could be put under financial strain and left with the burden of having to pay the remaining rental payments. Click here to read our latest blog all about life insurance and renting.

6. You’ve got loved ones who are financially dependent on you

Having dependents doesn’t necessarily mean having children - even your partner or your family members could be financially dependent on you.

If you were to become critically ill and unable to earn a living, do you think your dependents would be able to get by or would they struggle without your added income? Having a critical illness policy in place can negate the risk of your loved ones struggling to stay afloat without you.

A critical illness policy can provide a lump sum pay-out if you were to be diagnosed with a critical illness defined within your policy conditions. The cash injection that this policy could provide if you were to become critically ill could help you afford;

• Costs for carers
• Modifications you may have to make to your home
• Going on a memorable holiday with your loved ones
• Leave behind funds for your family
• You have a mortgage
  
  

7. Just stepped foot on the property ladder?

Getting a mortgage protection policy ensures that if the worst were to happen to you then the policy could pay out a lump sum. This lump sum could be used to pay off the remaining balance of your mortgage and depending on the type of mortgage you have, you can protect your mortgage in a few different ways.

If you have an interest-only mortgage, our protection specialists would recommend a level mortgage protection policy and if you have a repayment mortgage, the best type of policy to protect your mortgage would be a decreasing mortgage policy.

Having a mortgage is one of the biggest debts we are likely to have in our lives so ensuring it is adequately protected is crucial. 

8. You recently got married

Just tied the knot? Once you’ve enjoyed your honeymoon and settled down as newlyweds, it could be time to start looking into life insurance.

The main purpose behind any type of life insurance policy is to protect those closest to you and one of the most suitable types of policies that married or long-term couples can arrange is a level term life insurance policy.

Having a life insurance policy each ensures that if the worst were to happen to one of you within your policy term, the other one could still have a policy in place.

9. You’re worried about funeral costs

If there’s one event we will all be attending in our lives, it’s our funeral, and let’s face it, funerals can be expensive.

A whole of life insurance policy is a type of financial protection that pays out in the event of you dying. Unlike a term life insurance policy which covers you for a set term length, a whole of life policy covers you for the entirety of your life.

A whole of life insurance policy could provide you with peace of mind as the pay-out from your policy could contribute towards funeral costs, and as a result, help ensure your loved ones would not struggle financially.

10. You have no savings

In the current climate, it’s becoming increasingly difficult to save up money for that all-important rainy day fund. But having little to no savings behind you can leave you vulnerable if the worst-case scenario were to happen.

An income protection policy can be a long-term life insurance policy that provides a helping hand by paying regular payments each month, if you are unable to work due to accident or sickness, to help you afford the basics. The payments from an income protection policy are tax-free which means you’ll get the most out of the pay-out too!

At Caspian, we aim to provide you with simple, tailored advice on which is the best life insurance policy for you. Our friendly UK life insurance advisors are eager to get to know your circumstances to help you financially protect your loved ones. Don’t put it off - get your free quote today!

*Child Poverty Action Group