Do I need life insurance?
Everyone’s circumstances are different, and some people may benefit more from life insurance than others.
Life insurance can give you peace of mind that your loved ones are protected should the worst happen to you. But how can you decide if you need it?
Read on to find out more about why you might need life insurance – and why you might not.
What is life insurance?
Let’s start with a run-through of what life insurance actually is.
Life insurance is a type of “term cover”, meaning the policy pays out if the policy holder dies within a set amount of time (the policy term). Your loved ones can claim a lump sum after your death, providing extra financial security at an already difficult time.
If the policyholder lives past the set policy term, then it won’t pay out - so a payout isn’t guaranteed.
When should I get life insurance?
Most people think about getting life insurance at key life events.
| Life event | Why life insurance could be a good idea |
|---|---|
| Buying a house | Taking out life insurance could help pay off what’s left of the mortgage if you pass away within the policy term. It can help ensure your family can keep living in the home they love if you were no longer around. |
| Having children | Taking out life insurance can help your family to continue covering everyday expenses if you pass away within the policy term. A payout could also give financial support to your children, helping them with big costs like university, a wedding or buying their first home. |
| Getting married | Sorting out life insurance as newlyweds isn’t the most romantic way to start married life. But protecting your spouse financially if you die within the policy term can help avoid leaving them with debt. This could be particularly beneficial if you contribute more to shared expenses. The payout could pay off joint credit cards, car finance, household bills and more. |
| Having other financial dependents | You may have other people that depend on you financially, such as your partner, parents or other relatives. Getting the right protection in place can give you peace of mind that they’ll be provided for if the worst should happen. |
Of course, there are many other reasons why people choose to take out life insurance. But generally if you have people that depend on you financially, or any debts that could be inherited, then it’s worth thinking about getting cover.
Knowing your loved ones will get a lump sum if you die within your policy term can be reassuring for everyone.
Do I need life insurance for a mortgage?
Although it’s not a legal requirement, some mortgage lenders will only lend to you if you have life insurance in place. They may recommend a life insurance provider, but it’s up to you which provider you choose.
If you have a joint mortgage, it’s also worth thinking about whether your partner could afford the mortgage repayments without your income. Taking out life insurance could relieve this burden by paying off any remaining mortgage.
Similarly, if you plan for your property to be inherited by someone who may not be able to afford to make the mortgage repayments, you might plan for it to be paid off in the event of your death.
Do I need life insurance if I’m single?
If you’re single, whether or not you need life insurance will depend on who is financially dependent on you.
If you don’t have any financial dependents and you don’t have any debt that your family might inherit if you died, it may not be necessary.
What life insurance do I need?
Again, this depends on your situation. To help you decide what cover you need, it’s worth thinking about what the payout is needed for and therefore how much cover you’d need.
At Beagle Street we offer two types of life insurance - level and decreasing.
Both policy types are term products, meaning they only last a set amount of time. With level term, your payout will always be the same amount, whereas with decreasing term, the payout amount depends on when you die.
Level term life insurance
Level term life insurance will pay out an agreed sum if you die during the policy’s term.
This is generally best for paying off fixed costs such as household bills or funeral costs, or if you want to leave your family a cash lump sum when you die.
Your payout and your premiums won’t change throughout the length of your policy (unless you make changes to your policy).
Decreasing term life insurance
Decreasing term life insurance is typically cheaper than level term life insurance. This is because the value of the policy decreases over time, but your premiums stay the same throughout the policy term (unless you make any changes to your policy).
It’s often used to pay off debts like a repayment mortgage or other loans.
The intention is that the payout will always be enough to pay off the mortgage entirely, which means a smaller amount is needed as the debt gets smaller.
Should I get life insurance?
Life insurance can protect the people that rely on you financially.
Choosing the right cover for you and your loved ones can give you peace of mind that they’ll be able to cover essential costs if you’re no longer around and that they won’t be left with debt they can’t pay off.
It doesn’t have to be expensive to get that peace of mind. You could be paying as little as £6 a month* to protect your family's financial future.
With a Beagle Street life insurance policy, your premiums are also fixed and will never change (unless you make changes to your policy), so you won’t suddenly be surprised with a higher premium.
*Based on a 30 year old non-smoker, £200K decreasing term cover for 20 years.
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Find out how much life insurance could cost with Beagle Street
Our simple, online quick quote tool will let you know how much cover you can get and how much it’s likely to cost you. There’s no commitment to take out a policy.