If you have a family, life insurance just to cover the mortgage usually isn't enough. Your family may own the roof over their heads and have no mortgage to pay, but the household bills for council tax, utilities and food will still be rolling in.
If you're the main income earner and your partner stays at home to care for your children, it means if you were not there to provide an income, they would have to go out to work. Add your personal debts to the equation and your family could soon be feeling the financial strain to meet repayments.
The cost of life insurance has become much cheaper in recent years and there are simple ways to be able to increase the level of cover you have in place.
-You can take out a separate policy to cover the debt. If you are making regular repayments and there is a fixed end date to the loan a decreasing term policy would be the cheapest type of life policy to arrange, as the cover would decrease monthly in line with the outstanding debt.
-If you want to arrange insurance to replace your salary then a family income benefit policy is worth considering. This policy is designed to replace your income, and can be arranged to provide cover until your children grow up.
The cost of life insurance is relatively cheap and often a lot less than people expect. Premiums start so low that if you took your lunch to work one day instead of going to the pub, you could buy your family some life cover to insure against your debts.
What does the minimum £5 monthly premium buy you in decreasing term life assurance, if you had to cover a debt being gradually repaid over five years.
The key to life insurance is to find the best level of cover from the best value provider. Make the time to review the insurance policies you already have in place and take into consideration benefits your employer may already give you, such as a death in service scheme.
If your debt is on credit cards are you may already be paying for payment protection, so check out the small print as typically this sort of insurance will pay off an outstanding balance of up to £20,000 on death.
For those who can't afford payment protection cover (typically 79p a month for every £100 owed on a credit card) or protection for their loan because it is expensive, life insurance is a different but much cheaper alternative to consider. It won't cover you for accident, sickness or unemployment but the life cover will provide your family with a debt free future should you not be there to care for them.
Using an insurance broker like Torquil Clark Life Insurance is a straightforward way of shopping around for cheaper life insurance premiums from a reputable provider, saving you time and money.
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