Millions of people across the UK are putting their families in financial danger with inadequate Life Insurance cover, according to Direct Line.
A recent survey showed that, of people who have no Life Insurance or protection, half have a mortgage and/or children which will be left unprotected, if they should die unexpectedly.
40% of people who do have Life Insurance admitted that it would only cover the cost of their mortgage upon death. Although the mortgage payments are a big worry for families who suddenly lose an income, it does fail to take into consideration the additional costs of running a household in the medium and long term.
Raising a child costs an average of £109,000 and that’s before you add mortgage payments and bills. With the average UK woman having 1.91 children, those costs soon mount up.
Reasons for under-protecting
There are a range of reasons why people may put off, or neglect to take out adequate Life Insurance and financial protection, including:
- Being unable or unwilling to make payments for a policy they hope to never make use of
- Believing that mortgage and loan cover is enough to keep their family financially stable
- Having savings and an estate in place which will give their family adequate finances, should they die
- Believing that they are healthy
- Poor prioritisation
If you are currently unprotected and fall into one of these groups, now is the time to do more to protect your family, should the worst-case scenario become reality.
Even if you are one of the lucky few who have enough money in savings and investments to support your family after you’re gone, it is worth making sure that your income is protected, so that they can benefit even more from the wealth you leave behind.
You may think that Life Insurance is not for you, but with so many types available, it is likely that there will be a policy to suit the needs of you and your family.
Level-Term Assurance (LTA):
These policies are designed to pay a set lump sum if you die within the time frame specified. It often includes fixed monthly payments and is suited to families and households.
Decreasing-Term Assurance (DTA):
Usually used to cover loans and mortgage repayments, the amount the policy pays out decreases over the term.
Family Income Benefit FIB):
This policy pays a set monthly sum in the event of the holder’s death. This is useful for families who rely on a monthly income to pay bills.
Whole of Life (WoL):
This is an ongoing policy which can be paid into for any length of time. it does not have a set end date and will pay out to your beneficiaries upon your death. Due to the open-endedness and guaranteed pay-out, these are more expensive than fixed-term policies.
If you are still unsure as to which Life Insurance policy is suited to your lifestyle and household, do not hesitate to contact us for help.
If you don’t have Life Insurance in place yet, don’t worry, we’re not going to put you on the naughty step. But we do advise that you give us a call.