The desire to see loved ones protected in uncertain times is driving more and more Brits to consider their need for Life Insurance. Even if things are currently fairly comfortable, unexpected turns of bad luck can have huge knock-on effects for multiple people.
So who needs Life Insurance? It’s an oversimplification to say that it’s just ‘anyone whose death would have a financial impact on dependants.’ Exactly who depends on you, and how much extra financial support they’d need if you died makes the question more of a careful balance than one with a straight answer.
Take a look at the following situations where someone might require Life Insurance and see how their circumstances affect how they go about it.
Life Insurance for married people
For many people, marriage is the first big life change they go through. Entering into that kind of partnership with someone brings about a lot of new commitments, aside from the obvious.
Without insurance, the death of one partner, and the loss of one entire income, leaves just one person covering all household expenses which might include:
• credit cards
• car finance
• the rent or mortgage
• bills
Life Insurance during pregnancy
A lot of British newlyweds leave it until the first signs of pregnancy to get Life Insurance, but this can complicate matters. At Beagle Street the cost of your Life Insurance premiums aren’t affected if you get pregnant when you are already covered by a pre-existing life insurance policy. If you are buying Life Insurance and you are pregnant and have no early pregnancy complications then you won’t need to inform Beagle Street during the application process. However, if there are any pregnancy complications then it is important to inform us during our online application process, over the phone or via live chat. In light of this, couples who are planning on having children could save themselves worry later on by thinking of insurance early. For more information please read our guide explaining why pregnancy is relevant to Life Insurance.
Life Insurance for those with kids
Having children is the big wake-up for many people to leave something for the future. The standard ‘married with kids’ family model encourages arranging cover to protect not just the day-to-day expenses that come with raising a family, but also planning for the future and things like university.
Stay-at-home parents who aren’t bringing a salary into the house directly are still contributing in terms of caring for the kids, cooking, cleaning and ferrying the kids around. These are all important parts of the daily routine which are a financial expense that would need to be covered if the stay-at-home parent died. It’s easy to fall into the trap of thinking about Life Insurance as just covering an income, but it’s also there to maintain a quality of life, however that is maintained.
Life Insurance for single parents
Single parents, meanwhile, potentially have even greater need for insurance, but statistics show that less than a third of households containing single parent families, unmarried parents and same sex partnerships have Life Insurance cover [1]. Everything that prompts two parents to consider Life Insurance is effectively doubled for a single parent.
Getting Life Insurance after retirement
Advancing age is another big push that starts many people thinking about getting covered. Without Life Insurance, your spouse would find themselves having to cover all your shared living expenses and maintain their lifestyle alone, much in the same way as an uninsured newlywed couple.
Inheritance tax is another issue which Life Insurance can affect. Inheritance tax kicks in if your estate is valued at £325,000 and over, or £650,000 if you’re married [2]. However, getting a Life Insurance policy written in trust means Life Insurance doesn’t count towards that limit. Your insurer will be able to give you more details on how to do this.
With that accomplished, your Life Insurance payout can be used to cover the expenses of your funeral, settle any outstanding debts and protect your other assets. Without proper Life Insurance, even with a large estate, those assets would need to be sold off quickly to cover the arrangements.
Do business owners need Life Insurance?
If you own or run a business, it’s easy to think of that as separate from your personal circumstances, but in reality that’s rarely the case. Small businesses are the lifeblood of the British economy, and without Life Insurance, your death could cause the business to crumble and put people out of jobs. In this case, your employees are your dependants.
Life Insurance can help businesses by protecting against the financial impact an important staff member’s death would cause (Key Person Insurance). Alternatively, it can help one business partner fund a buyout of the deceased partner’s stake in the company in order to keep things going and provide the deceased’s family with the cash to stay on their feet.
What if you have a medical condition?
Those with diagnosed medical conditions can be put off from applying for Life Insurance for fear of higher premiums, or of being refused cover outright. This is a shame, because in many cases it’s these people who will benefit the most from being properly covered.
A responsible insurer will assess someone’s circumstances as an individual, including medical details, and come to a conclusion based on the facts. Someone with a relatively mild condition, the symptoms of which are being properly managed, might be seen as no greater risk than a ‘healthy’ person who smokes and works a high-risk job.
When it comes to Life Insurance, it always pays to ask around, compare offers and make a decision based on information and fact.
Life Insurance for single people
In the case of single people with no children, Life Insurance is less of a pressing investment, but there are situations where it can help. If you’re spending time or money caring for elderly parents or ill relatives, Life Insurance can go towards maintaining that care or keeping parents out of a home if they value that level of independence.
If you have outstanding debts, these will need to be satisfied when you die before any inheritance can be passed on. Life Insurance will add a small amount to your monthly outgoings, but if you’re managing debt responsibly it could help cover your debts and funeral expenses, preventing your relatives from being out of pocket if you die.
The right Life Insurance at the right price from Beagle Street
Whatever your situation, the decision to protect those closest to you with proper Life Insurance cover can be the first step towards peace of mind, both for them and for you. Here at Beagle Street, we’re dedicated to helping people find that peace of mind by building cover around your unique circumstances.
If you’re looking for cover that’s easy to understand, quick to set up and realistically priced, get in touch with us today. Talk to our experts about the kind of cover you need, or get a quick online Life Insurance quote today.