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Reasons to take out life insurance

5 minutes

  1. Common reasons for taking out life insurance

  2. Two main types of life insurance (or life cover)

  3. Saving money on your life insurance

Life insurance isn’t something people generally like to think or talk about, but it’s a way to give you peace of mind and protect your family’s future should you die.

Financial support certainly can’t compensate for the terrible loss of someone you love, but having to deal with the burden of debts and worries about finances is the last thing needed by those left behind.

Life Insurance allows you to provide some financial security for your family.

Common reasons for taking out life insurance

  • Getting married or becoming a parent – starting a family brings new responsibilities and many people begin to think about how they can best protect their family.
  • Protecting a mortgage – whether you live by yourself, with a spouse or significant other, you may want to buy life insurance as mortgage protection, to make sure it will be paid off should the worst happen.
  • Funeral expenses – funeral expenses, burial costs and medical bills can add up to a large amount. Life insurance can be used to plan for these final expenses and you can choose an amount of cover that meets your needs.

Two main types of life insurance (or life cover)

Term insurance is insurance that pays out a lump sum if you die during a particular period of time. You choose how long you want to be covered for, for example you may want your cover to tie in with the end date of a mortgage, or when you retire. It can help make sure that your family will be financially secure if you die during the set term. If you survive to the end of the policy's term, nothing is paid out and the policy ends.

Not sure what level of cover you need? Advice might be for you