There are different types of life insurance that can help protect your family. Here we look at some of the different stages of life where a family life insurance plan could help protect your nearest and dearest.
Who Needs Family Life Insurance?
Marriage and children tend to be the biggest triggers for life insurance decisions, so it’s not uncommon for people to seriously consider life insurance only when they have a family. But which product is right for you? There are countless family life insurance options available in the UK, but before wading through the different policies, you should start by considering your own life situation.
Below we have profiled a few examples of family arrangements and how life insurance could benefit them.
Young families
If you’re thinking about having a baby or have just become a parent, family life insurance is definitely something you’ll want to consider. Life as a parent means you face a whole new set of responsibilities and financial considerations. Suddenly you are responsible for another person; someone who completely relies on you for, well, everything! If something were to happen to you or your partner, would the other parent cope with the financial consequences alone?
Here Are Three Types of Life Insurance to Help Protect Your Family
Life Insurance
Life insurance gives you much-needed peace of mind knowing that if you die while the policy is covered, it could pay you cash. It could be used to protect your family’s lifestyle and day-to-day living expenses, or to help pay off your mortgage.
Declining Life Insurance
If you have a young family and own property, you may want to consider reducing life insurance, which is designed to protect your mortgage payment. Your cover amount decreases roughly in line with how your mortgage payment decreases.
Critical Illness Cover
If you can stretch your monthly budget a bit further, it might be worth looking at critical illness cover as well. It’s an option that can be added at an extra cost when you take out our life insurance or life insurance with a reduction, and can help minimize the financial impact on you and your family should you become critically ill. Child critical illness cover is automatically included, which can offer some financial relief during difficult times. With our specialist guide, we can help you decide how much critical illness cover you need.
Families with Older Children
As your children grow up, they are likely to have hobbies outside of school and home. Depending on the amount of your cover, if there is a valid claim, life insurance could help protect your mortgage and also help cover the ongoing costs your family incurs. This can include hobbies – from horse riding to dance lessons – to educational costs such as private tutoring and school fees. In your extended family, the cash sum could also help cover the care needs of elderly parents if they are financially dependent on you.
Divorced Parents
If you are the sole breadwinner and financial provider for your young, it can be a big responsibility. It’s horrible to think about, but have you thought about who would care for your loved ones and what financial support they would need if you died? Our life insurance can give you peace of mind knowing that your children could be financially taken care of should the worst happen to you while you are insured. It can pay out cash to your beneficiaries to help them when they grow up.
Divorced Parents
Let’s face it – life insurance isn’t the best topic of conversation on a first date, but as your relationship develops and you decide to live together, there’s no reason why you can’t consider separate or joint life insurance. This can be important if you need both incomes to pay the bills. Individual life insurance covers one person, while joint life insurance covers you and your partner. It is important to note that a joint life insurance policy pays out when the first person dies, after which the cover ends. In contrast, two individual policies pay out on each death and give you peace of mind knowing that should the relationship collapse, your cover will remain intact.
Home Owners
If you’ve just secured your first home – congratulations. You may feel like all your money has been spent on mortgage fees, lawyers, real estate agents, and maybe all those essential – and non essential – renovations. So adding life insurance at this point might seem like one headache too many, right? While no one likes extra monthly expenses, ask yourself if you or your partner could afford to stay in your home if one of you were to die without financial protection.
If you have an installment mortgage, one option could be Decreasing Life Insurance, where the amount of cover decreases roughly in line with how the mortgage payment decreases. Or if you have an interest-only mortgage or simply want to protect your loved ones financially, life insurance might be a better option for you.
Life Insurance During a Pandemic
It seems like a long time ago, but the COVID-19 pandemic has caused economic uncertainty for households in the UK and around the world. According to the Office for National Statistics (ONS), from the start of 2021, unlike the first phase of the lockdown, employed parents were less likely to be made redundant but still more likely to report lower incomes than non-parents.
Life insurance pays out on the death of the insured person covered by the policy, and tragically, more than 140,000 people have died in the UK as a result of COVID-19 since November 2021. In addition, many people have experienced long-term illness during the pandemic, which can underline the importance of other types of protection, such as income protection insurance. Here you get a regular monthly benefit if you are unable to work due to incapacity for work due to injury or illness resulting in loss of earnings.
Let’s face it—unforeseen events like a pandemic aren’t in any of our preferred life plans, but knowing your financial landscape can help you determine how much life insurance your family needs, no matter what the future holds.
Summary of Life Insurance Benefits for Your Family
Some things in life are just not worth worrying about. And like millions of parents, making sure your family is protected is undoubtedly your number one priority. Here are some of the benefits of legal and general life insurance:
Premiums from just £5 a month depending on the cover you need and your individual circumstances
Your cash can help pay your mortgage, rent or help with everyday living costs
Peace of mind knowing that life insurance can help protect your loved ones financially
Option to add critical illness cover at an additional cost when taking out the policy
Making changes to your statutory and general life insurance
When you think about starting or adding
