Do you need life insurance?

Life insurance can help your loved ones in the event of your death. But do you really need life insurance and is it essential? Many people find that life cover gives them greater peace of mind for their family’s financial security if they were to unexpectedly pass away. We look at the benefits of this type of policy and how it works.

According to research by Beagle Street, 48% of adults between the age of 18 and 40 do not have life insurance. It’s estimated that the cost of a premature death over a decade can cost surviving families an average of £195,475. However, the majority of people don’t think twice about making costlier monthly payments to an entertainment streaming service.

Nobody likes to think about their death, but it’s important to factor this into your life planning. If you were to die sooner than expected, have you made enough financial provision for your family? Would they have enough money to pay the mortgage or rent and household bills?

Some analysts have suggested that the fall in marriage rates and the rising age of first-time buyers might be partly to blame. Conversations around insurance are usually prompted by life events such as marriage or buying a property. Savills reports that the average age of a first-time buyer rose by 6.8% between 2010 and 2023. Despite many people cohabiting, it seems that important discussions around insurance simply aren’t taking place.

How does life insurance work?

Life insurance pays out a lump sum if the policyholder dies within the specified policy term. It can provide a financial safety net for surviving partners and families, especially if the policyholder was the main income earner.

The lump sum is sometimes enough to pay off an outstanding mortgage balance, as well as covering daily living costs and other spend. Some people use the lump sum payment to cover funeral costs and even the cost of education.

Research from Aviva shows that 45% of UK adults are losing sleep because of money worries. Without a life insurance policy in place, people could be leaving their families exposed to financial risk should the worst happen. Therefore, getting life cover in place will not only help you sleep more easily, but it’s an important form of family protection.

Life insurance advice

Life insurance is priced according to various risk elements, for example, if you are a smoker. Therefore, when it comes to arranging a suitable life policy for your situation, you will be asked a series of personal questions. These will cover a range of personal subjects such as your age, health, family medical background, and your occupation. As different careers have different risk levels, this will be taken into account when your policy is priced.

At Bubble Finance Hub, we have a team of approachable and supportive advisers who can explain how life insurance works. We will talk you through everything you need to know so you fully understand how this type of policy works.

If you would like to find out more about life insurance, get in touch to speak to our advisers.

As with all insurance policies, conditions and exclusions will apply.

Thank you for reading our blog, Do you need life insurance?

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